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TRANSCRIPT
Telecom Regulatory Authority of India
(TRAI)
Recommendations
on
Restructuring of Cable TV Services
25th July 2008
Mahanagar Doorsanchar Bhawan Jawahar Lal Nehru Marg
New Delhi-110002 Web-site: www.trai.gov.in
1
Table of Contents
Subject
Page No.
Preface 2
Chapter 1 Introduction 4
Chapter 2 Present functioning and Scope 10
Chapter 3 Licensing Framework relating to Local Cable TV Operators
19
Chapter 4 Licensing Framework relating to Multi System Operators
65
Chapter 5 Summary of Recommendations 98
Annexure -I International Experience 125
Annexure-II
Gist of Stakeholders’ comments 137
Annexure-III
Quality of Service Guidelines by TRAI
145
Annexure-IV
Performa for Information of Local Cable TV Operators to be maintained by the Licensing Authority
148
Annexure-V
Licensing terms & conditions for Local Cable TV Operators
149
Annexure-VI
Licensing terms & conditions for Multi System Operators
159
2
Preface
There has been an exponential growth in the Indian Cable TV industry in
the past two decades. The Cable TV transmission in the country is
predominantly analog and limited to provisioning of TV channels only.
Due to technological developments, existing Cable TV operators are likely
to face fierce competition from operators employing advance distribution
technologies like DTH, HITS, IPTV etc.
The Cable TV homes in India have risen to 78 million at the end of year
2007. Although the physical spread of Cable TV sector has been
significant, the sector in its present form is experiencing challenges of
technological upgradation, appropriate addressability and resources. The
regulatory framework needs to address the issues of transparency,
addressability, vertical restructuring, fragmented distribution chain, low
digitalisation of TV Networks and technological up-gradation.
The huge potential of Cable TV Network is presently limited to
provisioning of transmission of TV channels. While 52% of Internet
connections in North America are provided by Cable TV operators
resulting in fierce competition between telecom operators and Cable TV
operators in provisioning of various value-added services; contribution of
Cable TV operators in India in this regard is abysmal. The effective and
appropriate utilization of new technological advancements in Cable TV
sector will enable a much wider scope for Cable TV services in
comparison to what exists today. Such up-gradations will require huge
investments in the sector; necessitating a supportive and positive
regulatory environment to facilitate such a constructive growth.
3
The Authority initiated consultation process on various issues suo-motu
under section 11(1)(a) of TRAI Act 1997 in March 2008. Based on the
views of the stakeholders, International experience and in-depth internal
study these draft recommendations have been evolved. The Authority has
kept in view that most of the existing Cable TV operators are not having
huge funds and have already invested considerably in their Cable TV
Network. Therefore proposed regulatory framework has facilitated
migration of existing Cable TV operators and all forms of entry barriers
have been discouraged. Emphasis has been laid on long term stable,
organized, and supportive licensing framework to encourage innovation
and investments in the sector.
These recommendations are a step forward to restructure Cable TV
Networks to ensure effective licensing compliance, attract investment,
facilitate new value added services and encourage digitalisation.
It is hoped that these forward looking recommendations will help orderly
growth of the Cable TV services in the country and will also provide new
business opportunities to Cable TV operators for reaping the benefits of
technological advancements.
(Nripendra Misra) Chairman, TRAI
4
Chapter 1
Introduction
1.1 Cable television came into existence in India in 1983 when
Doordarshan started its services on cable networks in rural areas
of Rajasthan. In 1989 few entrepreneurs setup small Cable TV
Networks and started local video channels showing movies &
music videos after obtaining rights from film & music distributors.
The international satellite television was introduced in India during
1991 with the live coverage of the Gulf War by CNN. The spread of
Cable TV received a boost during 1992 with the launch of Cable TV
program networks from Zee telefilms and STAR group for beaming
India specific content. From just 410,000 Cable TV subscriber
households in early 1992, the number of Cable TV homes have
soared to 78 millions by the end of December 2007. The Indian
cable and satellite TV industry has become one of the fastest
growing industries in the world.
1.2 The cable and satellite TV broadcast business was largely driven by
small Cable TV operators, each catering to the needs of local
subscribers ranging from approximately 50 –1000. These Cable TV
Operators were using dedicated antennae to receive the signals
from broadcasters and coding it locally before sending it through
cable Network to the subscriber premises. According to industry
estimates, 60,000 Cable TV operators were functional in 2006 in
the country.
1.3 The model was good as long as number of broadcast channels
received by Cable TV Operators were limited; however phenomenal
increase in number of broadcast channels created operational
5
problem to Cable TV operators. They neither have sophisticated
encoding equipment nor enough space to put large number of
dishes to receive all broadcast signals before sending to their
subscribers.
1.4 An entity called Multi System Operators (MSOs) became functional
as middle point in the hierarchy of transmission. These MSOs have
established their headends in metros and major towns to receive
TV signals from different TV broadcasters, aggregate and distribute
these signals to Cable TV operators. Some of the contemporary
Cable TV Operators became their franchisee and rest had
commercial agreements with such MSOs to receive signals and
distribute it to their subscribers using their own Cable TV
Network. As the number of TV broadcast channels increased, the
Cable TV operators also upgraded their network to add more
bandwidth in their cable network, hence supporting higher
channel carrying capacity. Inspite of such consolidation in urban
and semi-urban areas, some of the local Cable TV operators (LCOs)
in rural areas continue to function independently by taking TV
signals directly from broadcasters and providing it to their
subscribers but number of channels so provided are generally
limited in number.
1.5 As per Media Partners Asia Ltd.’s report on Asia Pacific Pay-TV &
Broadband Markets 2008 India has around 225 million
households out of which 128 million households already have TV.
Report also says that there were around 78 million households
receiving Cable TV services at the end of December 2007. They
project that 61 % of the total TV households in the country get
Cable TV feed. Also there were approximately 3.2 million pay DTH
6
subscribers by the end of December 2007. This indicates that
there is a huge scope for future expansion of Cable TV Networks.
1.6 The present Television industry market size is estimated to be
approximately Rs.23000 Crores. The remarkable growth of the
industry to its present level is largely due to the entrepreneurial
skills of the Cable TV operators. However, the basic framework of
the cable industry is weak and not fully equipped to face new
challenges. Ministry of Information & Broadcasting’s working
group estimates that presently there are 30000 registered Cable TV
operators in the country, broadcasting over 339 cable and satellite
TV channels in national and regional languages, but authenticated
record of Cable TV operators is not available. The unconfirmed
reports even put number of Cable TV operators around 60,000
indicating an average of just 1200 subscribers per Cable TV
operator.
1.7 Most of the present Cable TV Networks are analog in nature and
hence have limited capacity (approximately 40 to 80 TV channels)
to deliver number of TV channels as available presently. As more
and more TV channels get introduced, there is an urgency to
upgrade the Cable TV Networks & systems through digitalisation.
1.8 Cable TV Subscribers are demanding various value added services
like Video on Demand (VoD), Interactive TV, Time shifted TV and
Interactive gaming, which are technically feasible on present
alternative technologies such as DTH, HITS, IPTV etc. In addition
convergence of technologies in telecom and broadcasting has also
made it possible to provide service like internet, broadband and
internet telephony over Cable TV Networks. However, for meeting
the above challenges, present Cable TV Networks need to be
upgraded which will require substantial investment.
7
1.9 As stated earlier, the Cable TV sector in India has developed
mainly for a limited purpose of providing broadcast channels to the
subscribers. Even there, a huge capacity constraint is being felt. A
comparison of Indian Cable TV Network with Cable TV Networks in
developed countries indicate that full potential of such cable
networks have not been exploited. While most of the Cable TV
operators worldover are providing advance services like Internet
(56% of Internet subscribers are on Cable TV Networks in North
America and 23% of total Internet subscribers worldover are being
served by Cable TV operators) and Internet enabled services to
their subscribers; in India, this percentage is miniscule. As per
Cable and Satellite Broadcasting Association of Asia (CASBAA)
report titled ‘India Digital Strategy’, only 10% of the existing Cable
TV homes are served by upgraded two way digital Cable TV
Networks though very few Cable TV operators are providing
Internet and other value added services.
1.10 The broadband penetration in India is very low. We have just 4.15
Million broadband subscribers at present. The Authority is
concerned to boost broadband penetration and several actions
have been initiated in this direction. Very recently the Authority
has floated a consultation paper on “Issue related to Internet
Telephony” to examine and address issues to encourage Internet
Telephony. The increasing convergence and likely introduction of
NGN will require high speed broadband access to subscribers.
Cable operators can contribute a lot in this direction as it will not
only increase broadband penetration but will drastically improve
cable operators business model. This will require upgradation of
present Cable TV Networks to two-way digital cable networks.
8
1.11 In above context, present fragmented Cable TV Network, lack of
technological up-gradation, limited capital inflow, and slow
digitalisation process are some of the key concerns for the
Authority. The Authority is of the view that a supportive regulatory
framework and proper supervisory guidance is necessary in order
to provide viable business model, attract investments, encourage
digitalisation, explore full capabilities of Cable TV Networks, and
ensure overall growth of well organized Cable TV sector. The
Authority is aware that many of the existing Cable TV operators
are not financially strong and have made significant investments.
Therefore, while bringing reform in the sector, interest of all such
operators have been protected and attempt has been made to
promote a stable, predictable and user friendly regulatory
framework to give boost to the Cable TV sector.
1.12 The Authority had suo-motu initiated consultation process with
Stakeholders by floating a detailed consultation paper to develop a
regulatory framework that will allow the Cable TV industry to grow
in an organized manner and to address the issues of technological
advancement, convergence, and increasing competition. Open
House Discussions were held at Bhopal (M.P.) and Pune
(Maharashtra) with stakeholders to get their views. TRAI also
placed draft recommendations on its website and sought
stakeholders’ comments.
1.13 The Authority deliberated on various issues that emerged from the
written submissions of the stakeholders (Annexure-II) and Open
House Discussions (OHD) keeping in view the International
practices (Annexure-I). The recommendations have been structured
in chapters one to five. Chapter 2 deals with present functioning &
scope. Chapter 3 deals with licensing framework relating to Local
9
Cable TV Operators (LCOs). Chapter 4 deals with licensing
framework relating to Multi System Operators (MSOs).
Recommendations on certain licensing terms and conditions for
LCOs & MSOs are common and hence have been repeated in
respective chapters for completion of licensing conditions. Chapter
5 summarizes all the recommendations.
10
Chapter 2
Present Functioning and Scope
2.1 Most of the Cable TV Networks in India deliver TV channels in
analog mode to the subscribers. In the beginning Cable TV
operators were able to show only 6-14 analog channels on their
networks due to limited bandwidth of contemporary Cable TV
Network. Since then, the capacity has been enhanced by extending
the bandwidth of the Cable TV distribution system. From a
bandwidth of 225 MHz in the early days of Cable TV, the networks
has progressively enhanced their capacity to 300 MHz, 450 MHz,
550 MHz, 750 MHz and now to 860 MHz, which is the largest
available bandwidth for Cable TV Networks worldwide. In the
future this could get enhanced to 1000 MHz. The bandwidth of
cable systems and maximum possible analog channels on such
systems are given in Table1:
Table 1
Bandwidth Maximum Number of analog Channels
300 MHz 36
450 MHz 54
550 MHz 67
750 MHz 92
860 MHz 106
2.2 Digitalisation of Cable TV Networks
2.2.1 In Metro cities most of the Cable TV homes receive 65 to 90
channels using a combination of Optical fibre and coaxial cables.
These Fibre-Coaxial cable networks are being gradually introduced
throughout the country. In fact presently Cable TV services in most
11
of the cities serve upto 60 channels over a 550 MHz bandwidth.
These networks often cater to typically 5000 customers per head
end. The smallest Cable TV Networks in the country may typically
deliver up to 30 channels over a 300 MHz bandwidth.
2.2.2 As per the data available on the website of Ministry of Information
& Broadcasting, there are 339 cable and satellite TV channels in
national and regional languages. Since channel carrying capacity
of the cable network even in its highest bandwidth slot of 860 MHz
is just 106 channels, only feasible option left to enhance the
channel carrying capacity is digitalisation of the network.
2.2.3 A single analog video signal occupies 8MHz of bandwidth on the
cable. By using bandwidth efficient digital modulation techniques
such as Quadrature Amplitude Modulation (QAM), data rates in
excess of 56Mb/s can be transmitted within 8MHz band. Using
Motion Picture Expert Group (MPEG) compression techniques, a
high quality video signal can be compressed into 3-4Mbps data
stream. Therefore, by upgrading a cable plant from analog to
digital TV transmission, one can achieve more channel capacity.
The 800 MHz of available downstream bandwidth in a modern
cable plant could, in theory, support over a thousand channels of
video services with MPEG and other compression techniques.
2.2.4 It can thus be seen that digitalisation is not just the desired path
to improve the quality of service and support various value added
services, it is becoming the necessity to support ever increasing
number of the channels on the Cable TV Network. Hence there is
an urgent need to encourage digitalisation. Cable TV operators will
require huge investments for digitalisation of their cable network.
12
2.3 Operation of Multi System Operators (MSOs)
2.3.1 Initially a Cable TV operator had to install separate dish antenna
for receiving signals from each broadcaster. With the increasing
number of broadcasters, number of such antennae also increased
and most of the Cable TV operators were not able to install
required number of dish antennae due to shortage of space and
huge finance requirements. This necessitated an aggregator
resulting in the entry of new entity called as Multi System Operator
(MSO). The MSO aggregates the signals obtained from different
broadcasters and provide these aggregated signals to Cable TV
operators either themselves or through their
franchisees/distributors.
2.3.2 Presently the distribution chain in the Cable TV industry consists
of two independent paths:
(i) Broadcasters <-> Multi System Operators (MSOs) <->
Franchisees/distributors <-> Local Cable TV operators
(LCOs);
(ii) Broadcasters <-> Independent local Cable TV operators.
The distribution chain is depicted in Fig. 2.
13
Fig 2: Cable TV distribution chain
2.3.3 The dependency of the Cable TV operators on MSOs has increased
significantly. Cable TV operators can provide those signals to their
customers as received from the MSOs. Therefore if capacity of the
cable networks have to be enhanced by digitalisation, similar
efforts are also required at MSO level to ensure availability of the
digital signal to Cable TV operators and ultimately to the
subscribers. This will require considerable investments.
2.3.4 Some of the stakeholders also pointed out that increasing
dependency of Cable TV operators on MSOs is being misused.
Sometimes distributors/ franchisees of MSOs may disconnect
signals to Cable TV operator without any prior notice and seek
undue enhanced commitment for subscriber base & higher
Broadcasters
Multi System Operators (MSOs) & Distributors/franc
Independent Local Cable Operators
Local Cable Operators (LCOs)
Households
14
payments. It was pointed out that present regulatory framework
does not envisage any franchisee or distributor of MSO and as
such there are no prescribed obligations for Cable TV operators
towards such entities. Cable TV operators sought this issue to be
deliberated and appropriate action to be proposed in overall
regulatory framework.
2.4 Conditional Access System (CAS):
2.4.1 Conditional Access System is utilised to introduce addressability in
Cable TV Networks along with providing signals in digital format. A
Conditional Access System (CAS) ensures that only duly
authorized subscribers are able to view a particular programming
package. A Conditional Access System mainly consists of an
integrated receiver decoder also called as set-top box (STB) at
subscriber premise. This is an electronic box, which contains the
necessary hardware, software, and interfaces to select, receive,
unscramble and view the programmes. Since signals are scrambled
in CAS, only those viewers with a valid signed contract with CAS
service providers are authorized to unscramble and view the
chosen programmes. Moreover, when the viewer chooses a pay
channel or a programme, the information related to subscriber
details, method of payment, and services purchased is stored and
updated in a database. Apart from selecting pay channels a CAS
may be used for provisioning of other services, like Video on
Demand (VoD), etc. In some cases, encrypted programmes may
also be received from different mechanisms like cable, satellite,
terrestrial broadcasting etc on the same STB.
2.5 Technological advancements
2.5.1 There are some other competing technologies like Headend in The
Sky (HITS), Direct To Home services (DTH), Internet Protocol TV
15
(IPTV), which are used to provide TV broadcasting services. Cable
TV operators have to compete with upcoming technologies and
therefore there is a need to consolidate the present service platform
to support provision of different services. Such robust platform
with digitalisation can not only provide higher broadcast channels,
music, games, but can also support plethora of other IP based
services like Internet telephony, Internet TV, Games, Internet
access etc.
2.5.2 Head end In The Sky (HITS)
2.5.2.1 Functionally, a typical HITS operator performs like a MSO. In
the HITS, the operator downlinks the channels of various
broadcasters at his earth station, de-encrypts the channels
wherever necessary and forms a bundle. Thereafter, the HITS
operator re-encrypts the pay channels segment of his bundle
and then uplinks the entire bundle to his HITS satellite in the
sky. The HITS satellite then beams down the bundle of channels
with a footprint spreading across the whole country. Thus the
Cable TV operators all over the country can downlink this
bundle of channels using a single dish and a few trans-
modulators. Thereafter, these digital channels are re-transmitted
by the Cable TV operators in the conventional way to the
subscribers, who use a set top box to de-encrypt the pay
channels, as in the case of CAS areas. The subscriber
management system (SMS) and the Quality of Service (QoS)
remain the responsibility of the HITS operator. TRAI has already
sent its recommendations on HITS on 17th Oct 2007 and it is
expected that Ministry of Information and Broadcasting will
notify it soon. This will facilitate local Cable TV operators to get
digital signals in any part of the country and facilitate good
quality reception by subscribers.
16
2.5.3 Direct To Home Services (DTH)
2.5.3.1 DTH is a distribution platform for multi-channel TV programmes
using a satellite system that transmits the programmes/provides
TV signals directly to subscribers’ premises. The reception of
signals/programmes requires a small dish antenna and a Set
Top Box. The Set Top Box contains software, which together with
the viewing card unscrambles the digital TV signals and allows
the viewer to watch the TV service. The viewing card acts as a
key to access any DTH platform for authorizing the service.
These services are becoming popular. Hence, Cable TV operators
have to upgrade their network to meet the challenges posed by
DTH operators.
2.5.4 Internet Protocol TV (IPTV)
2.5.4.1 Provision of the television channels to subscribers using high
speed Internet protocol (IP) technology is normally called as
IPTV. IPTV system delivers digital television service using
Internet Protocol (IP) over various multimedia access
technologies supporting high speed Internet. IPTV platform can
also provide services like Video on Demand (VoD), Time shifted
TV, Live Video and gaming etc. IPTV is also considered within
umbrella of triple play services and it also encompasses Voice,
Video and data. The transmission network of a Cable TV
operator (if designed to support two way operations) is capable to
provide IPTV services. In order to provide IPTV service Cable TV
operators can utilize their existing transmission infrastructure,
customer resource manager (CRM) and invoicing system. These
developments will help local Cable TV providers to have options
to provide various value added services.
17
2.5.5 Broadband and Internet Telephony through Cable TV Network
2.5.5.1 New technological developments like internet and other value
added services require two way communications in Cable TV
Networks. It is possible to provide broadband over these Cable
TV Networks using cable modem technologies like Data over
Cable Service Interface Specifications (DOCSIS), which permits
two way communications. DOCSIS system packetises the data
and sends it over the network at high speed, in a way quite
similar to IP networks. Along with broadband, Internet telephony
can also be provided over upgraded two-way Cable TV Networks.
Provisioning of Broadband and Internet Telephony over a Cable
TV Network is depicted in fig 3. Digitalisation of Cable TV
Network and launch of such services by Cable TV operators will
enhance the revenue potential and make better & viable
business model.
Fig 3: Broadband & Internet telephony through Cable TV Network
Cable TV
operator’s
headend
Cable Modem
Termination System
(CMTS)
2-way
Amplifier Filter
Cable modem
TV
PC
Internet
ATA
Cable supporting two
way communication
Customer Premise
18
2.6 Future scope for Cable TV operators:
2.6.1 Digitalisation is a growth driver for upgradation of present
analogue Cable TV Networks into Digital mode. Digital
transmission offers a number of advantages over analogue
broadcasting. Deployment of digital Cable TV Networks help to
provide not only internet and broadband services but several
interactive services like Video on Demand, Gaming and time
shifted TV etc. These networks have the potential to ultimately
provide converge services similar to the telecom networks. Many
companies in USA and a few other developed countries have
started providing voice and internet services on these networks
and are competing directly with the telecom companies. This
presents an attractive business model for Cable TV operators.
2.6.2 As per Media Partners Asia Limited’s report on Asia Pacific Pay-TV
& Broadband Markets, the estimate for Dec 2007 for digital Cable
TV & analog subscribers in India are around 1.4 million and 77
million respectively. The report indicates a big gap between digital
and analog services, indicating enormous scope for existing Cable
TV operators having analog networks to upgrade their networks. In
case Cable TV operators do not upgrade their networks in near
future, there is a likelihood of their customers migrating to other
digital platforms like DTH, IPTV etc., for good quality signals and
latest value added services.
19
Chapter 3
Licensing Framework relating to Local Cable TV Operators
(LCOs)
3.1 The Indian cable and satellite TV broadcast business is one of the
largest cable markets in the world. Low-tech, homegrown cable
operators have become ubiquitous as the key carriers of broadcast
channels. Some of the systemic and structural weaknesses due to
lack of clear roadmap and under investment is distinctly apparent.
This chapter analyses such weaknesses and recommends remedial
action for supportive user-friendly regulatory environment for all-
round development of Cable TV Sector.
3.2 Present Legal provisions and Regulatory Framework
3.2.1 The Cable TV industry was provided legal framework through the
promulgation of the Cable Television Networks (Regulation)
Ordinance, 1994 on September 29, 1994, which was converted
into the Cable Television Networks (Regulation) Act, 1995 (7 of
1995) on 25th March 1995 and the Cable Television Network Rules,
1994 framed under the said Ordinance. Some of the major
provisions of the Cable Television Networks (Regulation) Act, 1995
(7 of 1995) and the Cable Television Network Rules, 1994 are as
follows:
• To operate a cable television network, the operator has to be
registered with the registering authority (head post-master of
the head post office of the area) as a Cable TV operator.
(Section 3 of the Cable Television Networks (Regulation) Act,
1995).
20
• Registration is renewable after every twelve months at an
annual fee of rupees five hundred. (Rule 3 of the Cable
Television Networks Rules, 1994).
• The person intending to register as Cable TV operator can be
(i) an individual who is a citizen of India; (ii) an association of individuals or body of individuals,
whether incorporated or not, whose members are citizens of India;
(iii) a company in which not less than fifty-one percent, of the paid-up share capital is held by the citizens of India; (Clause (e) of section 2 of the Cable Television
Networks (Regulation) Act, 1995)
• No person can transmit or retransmit programmes and
advertisements through the Cable TV Network unless they
conform to the programming code and the advertisement code
respectively prescribed under the rules (section 5 & section 6
of the Cable Television Networks (Regulation) Act, 1995).
• Cable TV operators have to use equipments that conform to
the standards prescribed by the Bureau of Indian Standards,
on and from the expiry of a period of three years from the date
of establishment and publication of such standards (section 9
of the Cable Television Networks (Regulation) Act, 1995).
• The Cable Television Networks (Regulation) Act, 1995 provides
for seizure and confiscation of equipment of Cable TV
operators if they are unregistered or breach programming or
advertisement code or fail to transmit Doordarshan channels
as prescribed under the Cable Television Networks
(Regulation) Act, 1995 or violate provisions relating to
transmission of programmes of pay channels through
21
addressable system as required under section 4A of the Act in
States, cities, towns or areas notified by the Central
Government under the provisions of section 4A (Section 11 of
the Cable Television Networks (Regulation) Act, 1995).
• Contravention of any of the provisions of the Cable Television
Networks (Regulation) Act, 1995 could result in imprisonment
upto two years and/or fine up to one thousand rupees for the
first offence and imprisonment upto five years and fine upto
five thousand rupees for every subsequent offence (section 16
of chapter 4 of the Cable Television Networks (Regulation) Act,
1995).
• In terms of section 18 of the Cable Television Networks
(Regulation) Act, 1995, no court shall take cognizance of any
offence punishable under the Act unless there is a written
complaint by an authorised officer.
• Every Cable TV operator in a Conditional Access System (CAS)
notified area is required to submit information regarding the
number of total subscribers, subscription rates, number of
subscribers of basic tier and other pay channels to the Central
Government (sub-section 9 of section 4A of the Cable
Television Networks (Regulation) Act ,1995).
3.3 Upgradation of networks in Cable TV sector through induction
of new technologies will require significant investments. The
investments flow in a sector which is well organized and has
well defined predictable and stable regulatory framework. Cable
TV sector urgently needs restructuring to encourage its
modernization and effective functioning. The thrust should be
to encourage investment in the sector for upgradation of
22
networks and technologies to provide various services,
applications and content including digitalisation and
addressability thus moving towards greater transparency. This
will require a supportive framework and regulatory guidance to
boost the growth of the industry in this age of fierce
competition.
3.4 As per the Cable Television Networks (Regulation) Act, 1995, a
local cable operator is required to register with the Head Post
Master of the Head Post Office of the concerned area for giving
services to the subscribers/TV viewers. The process of
registration is simple and the scrutiny is restricted to the
submission of certain basic information with corroborative
documents. It is not expected of the postal authorities to
conduct any verification.
3.5 The present procedure of registration has several weaknesses.
There is no system to track renewal. The data regarding grant
of registration are also not available in Ministry of Information
& Broadcasting or its allied offices. There is no clarity regarding
performance obligations of the cable operators. Accordingly, the
scheme for de-registration or any other form of supervisory
intervention is totally lacking. The Authority is of the view that
the short-comings can be effectively addressed by replacing
present registration procedure with a licensing regime.
3.6 In a changed scenario, the Cable TV operators may offer more
than one services under growing convergence regime. A certain
minimum technical knowledge and financial strength backed
with organizational ability is required. Therefore, it would be
advisable to bring the Cable TV functionary/ service provider
under a progressive, predictable and transparent licensing
23
regime. This would also enable introduction of light touch
regulation.
3.7 The present provisions of the Cable Television Networks
(Regulation) Act, 1995 and the Cable Television Networks Rules
1994 neither provide a separate role for Multi System Operators
(MSOs) nor recognise the MSO as an entity in non CAS area.
The entity of MSO has been recognized in the CAS regime and
permission to existing MSOs is granted by Ministry of
Information & Broadcasting for providing cable services with
addressable system in CAS notified areas. The functions of
MSOs in both CAS and non-CAS areas are quite similar. An
MSO functions in close coordination with broadcasters as
content aggregator and its onwards distribution to local cable
operators. To perform these functions, the MSOs have to make
substantial investments for infrastructure development
including setting up of head-ends. In areas notified under CAS,
MSOs have additional responsibilities relating to addressability
and subscriber management system (SMS). It is thus evident
that MSOs have distinct functional role at higher level in
transmission system hierarchy whereas LCO is primarily
entrusted with the responsibility for providing TV signals to the
customers. Thus, a separate licensing framework is required for
MSOs which has been addressed in chapter 4. This is also in
tune with the comments and view points of the stakeholders.
3.8 In view of the above, the Authority recommends:
(a) The present system of registration for Cable TV
operators should be replaced by a licensing
framework.
24
(b) A separate licensing provision for Multi System
Operators (MSOs) should be introduced thus
recognizing them as an entity separate from Cable
TV operators. (Please refer to Chapter 4)
3.9 Licensing framework for Local Cable TV operators
3.9.1 The licensing framework seeks effective compliance with
reporting requirements, attract investments and to encourage
digitalisation on long term basis. The Authority is conscious of
the contributions made by present LCOs. It also recognizes the
investments made by the Cable TV operators in terms of time,
manpower and money. Therefore, the framework being
suggested encourages a continuing role for the present Cable
TV operators.
3.9.2 Definition of person and eligibility
3.9.2.1 The Cable Television Networks (Regulation) Act, 1995 defines a
person as
“an individual who is citizen of India; an association of
individuals or body of individuals, whether incorporated or not,
whose members are citizen of India; and a company in which not
less than fifty-one percent of the paid up share capital is held by
the citizens of India.”
3.9.2.2 The definition of ‘person’ in relation to a company requires
clarification in present context. The expression citizen of India
as defined presently needs further clarification. This creates a
doubt whether a company (Indian or multinational) in which
Indian financial institutions, corporate or Non Resident Indians
(NRIs) have more than fifty-one per cent of the paid-up share
25
capital is eligible to apply for the registration for Cable TV
operations or not.
3.9.2.3 The draft Broadcasting Services Regulation Bill 2007
defines the person as:
� An individual who is a citizen of India; � An association of individuals or body of individuals,
whether incorporated or not, whose members are citizens of India;
� A company as defined in section 3 of the Companies Act, 1956 (1 of 1956) with such eligibility conditions as may be specified by the Central Government or the Authority;
(Note: It would thus appear to be possible for the central Government to notify Foreign Investment limits as may be decided by it from time to time.)
3.9.2.4 The above definition provides clarity regarding the definition of
“person” and therefore the Authority recommends this
definition (para 3.9.2.3) of “person” to be adopted for the
license for Cable TV operators. It is clarified that there is
no bar for MSOs to get the license for LCOs if they fulfill
the eligibility conditions as defined for LCOs.
3.9.3 Service Area
3.9.3.1 Presently a person providing Cable TV service has to be
registered with the Head Post Master of the concerned area.
However, area of operation of a Cable TV operator has not been
clearly defined. A Cable TV operator may have to seek multiple
registrations from the post offices in order to provide service in
the entire area of a district. This is avoidable as it hampers the
growth of the business of Cable TV operators.
3.9.3.2 The future belongs to convergence of different Information and
Communication Technology (ICT) sectors which will open
26
enormous opportunities to the Cable TV operators to provide
services like Internet & Broadband. A larger service area is
justified for a viable business model of Cable TV operators.
3.9.3.3 During the course of open house discussions, the weaknesses
in the present system of registration of Cable TV Operators were
highlighted. As already mentioned, there is a lack of clarity as to
whether a Cable TV Operator registered with a Head Post Office
can provide Cable TV services outside the jurisdictional area of
the Head Post Office with which it is registered. Further, many
small Head Post Offices in remote areas are not properly
equipped to handle the registration of Cable TV operators.
Sometimes the prescribed forms are not available with these
small Head Post Offices. There is lack of clarity about the
documents to be attached with the application for registration.
Moreover, the criterion for acceptance or rejection of application
of Cable TV Operators for registration is not clearly defined.
There is no appellate authority for an applicant aggrieved by
rejection/ delay in grant of the registration. In the present
dispensation, compilation of records and data about registration
of Cable TV operators is almost non-existent. These weaknesses
can be effectively addressed by having a larger service area of
license and having licensing of Cable Operators at the District
level so that the Postal Authorities are also properly equipped
by way of trained manpower and requisite forms etc to handle
the applications for grant of license to Cable Operators.
3.9.3.4 Accordingly, the Authority is of the view that the service area of
license of a Cable TV Operator should be the revenue district.
Moreover, there should be State level licenses also for those
cable operators who wish to provide services in more than one
27
districts of a State. The service area of license for such State
level licenses should be the entire State. The license both for
district and state level should however be on non-exclusive
basis.
3.9.3.5 Accordingly, the Authority recommends
• The service area for Cable TV service license should be
the Revenue District or the geographical boundaries of
the State, as the case may be, in accordance to the
license.
• The cable TV operator can operate in any/ all locality/
localities of the service area of license (District or the
State as the case may be) on non-exclusive basis. There
will be no restriction on cable TV operators to provide
service in any part of the service area of license (District
or the State, as the case may be) on the ground of
existence of incumbent Cable TV operator(s) in such part
of the service area. Thus it is envisaged that once a
Local Cable Operator (LCO) obtains the license, he will
have complete freedom to operate in any part of licensed
service area.
3.9.4 Licensing Authority
3.9.4.1 The Cable TV operator is defined in The Cable Television
Network (Regulation) Act 1995 as
“‘Cable Operator’ means any person who provides cable Service
through a Cable television network or otherwise controls or is
responsible for the management and operation of a cable
television Network.”
28
Under the new dispensation, no person should be permitted to
operate a cable television network before being granted a license
as a Cable TV Operator.
3.9.4.2 As the service area for the recommended license is the Revenue
District or the geographical boundaries of the State, the
licensing authority should be having jurisdiction over the entire
Revenue District or the State, as the case may be, and should
be accessible to the applicants. While recommending larger
service area for license, it has to be kept in mind that there may
be more than one Head Post Offices in a Revenue District and
there are many revenue districts in each State. Therefore, in the
new system, the Senior Superintendent of Post Offices (Division
Head) in whose area the revenue district falls is being
recommended as the Licensing Authority for District Level
licenses. Further, for State level license for cable operation, the
Chief Post Master General of the Circle or any other officer
nominated by the Chief Post Master General for the purpose
should be the licensing authority.
3.9.4.3 The offices of most of the Senior Superintendents of Post Offices
(Division Head) in the districts are presently computerized. The
offices of the Chief Post Masters General of different Circles are
also computerized. Department of Posts is also in the process of
creating their own network to connect the large number of post
offices in the country. In case licenses at Revenue District level
are given through the Senior Superintendents of Post Offices
(Division Head) of the district and for State level are given
through the Chief Post Master General of the Circle, presence of
nationwide computer network of the Postal Department will
29
make it easier to maintain computerized information of the
Cable TV operators.
3.9.4.4 The Authority therefore recommends
• No person shall operate a cable television network unless
he is licensed as a cable operator.
• The Senior Superintendent of Post Offices (Division
Head) in whose area the revenue district falls shall grant
District Level licenses to Cable TV operators on receipt
of application form, entry fee, other supporting
documents as defined and after fulfilling other
formalities.
• Further, for State level license for cable operation, the
Chief Post Master General of the Circle or any other
officer nominated by the Chief Post Master General for
the purpose shall grant licenses to Cable TV operators on
receipt of application form, entry fee, other supporting
documents as defined and after fulfilling other
formalities.
• Department of Posts may be required to devise an
appropriate code numbering plan for the whole country
so that each licensor will allot a unique license number
to every licensee. Such License number should consist of
separately identifiable digits for particular state code,
area code, LCO unique identity and validity. This will
facilitate Computer-based scrutiny of Cable TV
operators, their renewal etc.
3.9.5 List of documents to be submitted along with application
3.9.5.1 The Cable Television Network (Regulation) Act, 1995 does not
clearly specify the list of documents to be submitted alongwith
30
the application for registration for Cable TV operators. There are
instances of unrelated documents being sought by the Post
Master for registration of Cable TV Operators in existing
framework.
3.9.5.2 It is appropriate to clearly list out the documents to accompany
with the application form so that the licensing procedure is
transparent and license seekers do not face any harassment.
The licensing authority will check the validity of all such
documents before granting the license.
3.9.5.3 The Authority, therefore, recommends: Following
documents shall be submitted along with the application
for grant of license for Cable TV services:
a) In case of individual (i) ID proof (ii) Proof of residence (iii) PAN number (iv) Copy of current Income Tax Return (v) Service Tax registration number (If the number is
not available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of license)
(vi) Affidavit stating that he has not been convicted for any criminal offence
[Note: Individuals convicted for any criminal offence
shall not be eligible for the license]
b) In case of association or body of individuals (i) Document by which the association or body of
individuals has come into existence, including address and other details
(ii) PAN number (iii) Copies of current Tax returns for Income Tax and
Service Tax. In case of newly constituted association or body of individuals which have not filed any such returns, the Service Tax registration number should be furnished (If the number is not available at the
31
time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of license).
c) In case of companies
(i) A copy of the certificate of incorporation of the company alongwith copies of Memorandum of Association and Articles of Association
(ii) PAN number (iii) Copies of current Tax returns for Income Tax and
Service Tax. In case of new companies which have not filed any such returns, the Service Tax registration number (If the number is not available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of licence).
[Note: Any change in the Memorandum of Association and/or Articles of Association shall be intimated to the licensing authority within seven days of such change.]
d) It is further recommended that an applicant whose license has been cancelled/ terminated earlier shall not be eligible for a fresh license.
3.9.6 Duration of License
3.9.6.1 Presently duration of registration for Cable TV operator is only
one year, with a provision for renewal. The duration of one year
is grossly inadequate for making a long term investment and
business plan by a Cable TV operator. A proper business plan
will help Cable TV sector for attracting inflow of investment
which may be crucial for the upgradation of existing Cable TV
Networks. Some of the stakeholders have also favored a longer
duration of license for Cable TV operators.
3.9.6.2 In view of above the Authority recommends
• The duration of license for Cable TV services should be
five years.
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3.9.7 Entry Fee and the Administrative Cess
3.9.7.1 Presently the registration fee for Cable TV operators is Rs 500/-,
which is valid only for one year. After one year Cable TV
operator has to renew his registration by paying additional Rs
500/-. This fee has not been revised since 1995. There is a
strong case to revise the entry fee to ensure that only serious
applicants come forward for license.
3.9.7.2 Considering that many Cable TV operators are serving small
areas, stipulated license fees should not impose unnecessary
costs on such existing operators. Higher entry fee may also act
as entry barrier and may not provide a viable business model
for them. The goal of the Authority is to encourage faster growth
of Cable TV sector. Accordingly, keeping in view the enhanced
license period of five years, an entry fee of Rupees Ten
Thousand (Rs. 10,000/-) for District level license and Rupees
One Lakh (Rs. 100,000/-) for State level license is
recommended.
3.9.7.3 As mentioned earlier, there are approximately 60,000 Cable TV
operators. Presently they have obtained registration from
different head post offices. Maintenance of the records for such
a large number of Cable TV operators is a gigantic task. There
is also limited record of renewed registrations. It is probable
that some cable operators could be functioning without
obtaining renewal of the registration. In case the licensing
regime is introduced, the Department of Posts will be required
to maintain the updated records of all the licenses both at the
licensor level and also at the identified central level. This would
need appropriate funds for effective discharge of the licensing
functions. Therefore, the Authority recommends that an
33
additional administrative cess of ten percent of license fee may
be realized from license seekers and such a fund should be kept
at the level of Sr. Superintendent of Post Offices responsible for
the grant of revenue district licenses. Similarly, the cess
collected from the applicants seeking state level license may be
maintained at the Chief Post Master General of the circle.
3.9.7.4 Some of the stakeholders opined that a reduced entry fee may
be levied from LCOs providing services in rural areas. Since
area of the operation for LCOs has been prescribed as district
and the state, then to monitor whether LCO is providing Cable
TV service only in a rural area will be difficult and effective
monitoring to limit the operational area of such LCOs to rural
area only will be almost impossible.
3.9.7.5 Stakeholders’ comments have also been received to reduce the
entry fee of LCOs and MSOs in regions like north East, J&K etc.
It was pleaded that operations of cable TV networks in such
areas may be commercially less viabile due to geographical
conditions, low population, difficult terrain and socio-economic
background etc. Therefore reduction in the entry fee has been
suggested.
3.9.7.6 It may be noted that NE and J&K regions are classified as
special category states for plan purpose considering various
socio-economic parameters. An encouragement for the
development of cable TV networks in such areas may be
desirable for the limited period. In view of the above, the
Authority is of the view that 50% reduction in the entry fee for
LCOs may be granted for application received during the initial
period of three years from the date of notification of this revised
34
licensing framework. The decision may be reviewed after three
years by Ministry of Information and broadcasting.
3.9.7.7 In view of above the Authority recommends
• An entry fee of Rupees Ten Thousand (Rs 10,000/-) (non
refundable) may be fixed for obtaining District level
Cable TV service license.
• An entry fee of Rupees One Lakh (Rs. 100,000/-) (non
refundable) may be fixed for obtaining State level Cable
TV service license.
• A scheme for administrative cess, amounting to ten
percent of license fee, should be evolved to meet the
contingency needs of the Department of Posts for
maintenance of records etc., of Cable TV operators.
Such a cess should be imposed on the licenses. This
should be retained at the licensing authority level and
should not be credited to the Consolidated Fund of
India. The licensing authority may levy, in addition to
the entry fee of Rupees Ten Thousand or Rupees One
lakhs, as the case may be, the administrative cess at the
rate of 10 per cent of the entry fee. The guidelines for
collection, maintenance of records, utilization and audit
of such an administrative cess may be evolved by the
Ministry of Information & Broadcasting in consultation
with Department of Posts.
• There will be no annual license fee.
• The entry fee for LCOs may be reduced to 50 % for their
license in NE and J&K region for the applications
received during initial period of three years from the
date of notifications of new licensing regime. The
35
decision may be reviewed after three years by Ministry of
Information and broadcasting.
3.9.8 Timeframe for processing of license application
3.9.8.1 Stakeholders have expressed the views that there should be a
specified authority for registering complaint or for making
representation on matters relating to issue of the licenses for
Cable TV Network. Stakeholders also suggested well defined
timeframe for issue of the license for operation of Cable TV
Networks. Presently the Cable Television Networks (Regulation)
Act, 1995 and Cable Television Networks Rules, 1994 do not
prescribe any time limit for grant of registration. There have
been cases where head post master of concerned post office has
neither granted the registration nor communicated any reasons
for the delay in processing of the applications. Even though the
Cable Television Networks Rules, 1994 (the proviso to rule 5)
mandates that the registering authority shall inform the
applicant in the prescribed form (Form IV) the reasons for
refusal of registration, but the very purpose of the said
provision may be defeated if there is no time limit for such a
communication. Also, there is no provision for the appellate
authority in the Cable Television Network (Regulation) Act 1995,
to whom one can appeal in case he does not get registration as
a cable operator in a reasonable time.
3.9.8.2 In a well defined, supportive regulatory framework, the
approval process for a license should have a reasonable and
definite time frame. The license should either be granted or
reasons for not granting the license should be communicated to
the concerned applicant within the stipulated time frame. The
reasons for refusal should be clear. Applicant should also be
36
given an opportunity to appeal in case he is not satisfied with
the reasons for refusal of the license. Provision for an appellate
authority should also be built into the licensing framework.
3.9.8.3 As the licensing authority is the Senior Superintendent of Post
Offices (Division Head) for District Level licenses and the Chief
Post Master General or any other officer nominated for the
purpose for State level license, it will be appropriate that the
appellate authority for District Level licenses should be the
Chief Post Mater General of the circle having jurisdiction over
the Senior Superintendent of Post Offices (Division Head) or any
other suitable officer nominated by him. The appellate authority
for the state level licenses shall be CPMG/Pr. CPMG as the case
may be.
3.9.8.4 The provisions regarding appellate authority as proposed above
should be in addition to, and not in derogation of, any other law
for the time being in force.
3.9.8.5 In view of above discussions, the Authority recommends
• Licensing authority shall grant license for operation of
Cable TV Network within 45 days from the date of the
receipt of the application accompanied with all the
required documents and payment of applicable entry fee.
• In case of refusal to grant license for operation of Cable
TV Network, the reasons for the same shall be
communicated to the applicant within 45 days.
• The appellate authority for District Level licenses shall
be the Chief Post Master General of the circle having
jurisdiction over the Senior Superintendent of Post
Offices (Division Head) or an officer nominated by him.
37
• For the State level licenses, the CPMG/Pr. CPMG shall be
the appellate Authority, as the case may be.
• Applicant shall have option to appeal to Appellate
Authority within 30 days of receipt of such refusal or
within 90 Days from the date of receipt of submission of
application seeking license to operate Cable TV Network
by the licensing authority, as the case may be.
• The provisions regarding appellate authority as proposed
above should be in addition to, and not in derogation of,
any other law for the time being in force.
3.9.9 Renewal process 3.9.9.1 Presently a Cable TV operator for renewal of the registration has
to apply to the registering authority in the form similar to that
used for new registration along with a fee of Rs 500/-. The
Cable Television Networks (Regulation) Act, 1995 and the Cable
Television Networks Rules 1994 do not provide for verification
before renewal as to whether the operator has committed any
breach of terms & conditions and paid the requisite levies. As
such even a defaulter may succeed in renewal of its registration.
3.9.9.2 It is reasonable to assume that licenses will be renewed, subject
to satisfactory compliance with license conditions. The licensee
must apply for renewal well in advance before the expiry of the
current license so that sufficient time is available for the
authorities to verify the requisite conditions for renewal process.
Smooth and well defined renewal process is also important for
efficient service to subscribers. It will also be desirable to collect
details of total numbers of subscribers, area of operation, type
of TV signal feed (analog/digital) to have a holistic view of Cable
TV Sector
38
3.9.9.3 In view of the above, the application for renewal of license
should be made by a cable operator at least 3 months in
advance from the date of expiry of license. On receipt of
application, the Licensing Authority will verify that the licensee
has not breached the terms and conditions of the license. For
this purpose, he will seek information from the authorised
officer of the district as provided in the Cable Television
Network (Regulation) Act 1995. The comments, if any, should
reach the licensing authority within a period of four weeks from
the receipt of the letter. If no reply is given by the authorised
officer within the stipulated period, it will be assumed that there
is nothing adverse against the said Cable TV operator. The
licensing authority will renew the license for further period of 5
years on payment of prescribed fee of Rupees Ten Thousand
(Rs. 10,000/-) for renewal of District level license and Rupees
One Lakh (Rs. 100,000/-) for renewal of State level Cable TV
license, as the case may be. Department of Post will also collect
10 % of the total renewal fee collected as administrative cess. In
case the licensing authority is notified of serious breach of
licensing conditions, then the request for renewal of the license
shall be withheld and a show cause notice shall be
communicated to the concerned Cable TV operator. The
decision on show cause notice shall be taken in six weeks in
accordance with the guidelines issued by Ministry of
Information and Broadcasting / TRAI from time to time. The
concerned Cable TV operator can appeal to the appellate
authority within 30 days of date of communication of rejection,
in case renewal is denied.
39
3.9.9.4 Accordingly the Authority recommends
• Application for renewal of Cable TV license shall be made
to the Licensing Authority (The Senior Superintendent of
Post Offices (Division Head) for District Level licenses
and the Chief Post Master General of the circle for State
level license) by the concerned Cable TV operator 3
months in advance of the date of expiry of license.
• License shall also provide details of total number of their
subscribers, area of operation, type of signal feed
(Analog/Digital) along with the request for renewal.
• An LCO seeking renewal will also submit details
regarding area of operation and number of subscribers to
the licensing authority.
• LCO shall submit the following documents along with
application for renewal of license:
o Copy of current Income Tax, Entertainment tax
and Service Tax returns filed;
o Details of the authorised officer of the area to
whom the licensee is reporting;
• Self certification that the licensee has neither been
penalized nor debarred by authorized officer from
providing service for any breach of licensing terms and
conditions or any other unlawful activity.
• The Licensing Authority shall seek comments from the
concerned authorised officer specified in the Cable
Television Network (Regulation) Act, 1995, to ascertain
about any breach of the licensing conditions.
• If no reply is received from the authorised officer within
four weeks, it will be assumed that there is nothing
adverse against the said Cable TV operator and licensing
40
authority shall renew the license for a further period of 5
years on payment of prescribed fee.
• The fee for renewal of District level Cable TV license
should be Rupees Ten Thousand (Rs. 10,000/-).
• The fee for renewal of State level Cable TV license should
be Rupees One Lakh (Rs. 100,000/-).
• Department of Post may levy, in addition to the
applicable renewal fee, an amount calculated at the rate
of ten per cent of the total renewal fee as administrative
cess.
• In case the licensing authority is informed of serious
breach of licensing conditions by the authorised officer,
then the request for renewal of the license shall be
withheld and a show cause notice shall be issued to him.
The licensing authority shall take decision within six
weeks in accordance with the guidelines issued by
Ministry of I&B / TRAI from time to time. If the renewal
is denied then the reasons for such rejection shall be
communicated to the concerned Cable TV operator. Such
Cable TV operator can appeal to the appellate authority
within 30 days of such rejection.
• Ministry of I&B/TRAI shall frame guidelines indicating
the nature of breaches which will be treated as serious,
warranting refusal of renewals or cancellation of license
and such guidelines may be made binding on the
licensee.
3.9.10 Suspension and Termination of License
3.9.10.1 The licensed Cable TV operator must comply with provisions of
Cable Television Network (Regulation) Act, 1995 and the Rules
41
thereunder and the licensing provisions. Penalty provisions are
necessary as a deterrent for breach of licensing terms and
conditions and to ensure smooth cable service and for
streamlining of Cable TV operations.
3.9.10.2 While authorised officers have been given certain powers to
control breach of the provisions of the Cable Television
Networks (Regulation) Act, 1995 and the Cable Television
Networks Rule 1994, it is also necessary to ensure that Cable
TV operators violating the licensing and other regulatory
provisions are suitably penalised. Accordingly, it is necessary
that the license must have provision to terminate the license for
breach of terms and conditions of license. In case of violation of
any of the provisions of the Cable Television Networks
(Regulation) Act, 1995 or any provisions in TRAI’s Regulations,
Directions or Orders, such penalty shall be without prejudice to
any action which may be initiated against the licensee under
the relevant provisions of the Cable Television Networks
(Regulation) Act, 1995 or the Telecom Regulatory Authority of
India Act, 1997, as the case may be.
3.9.10.3 The cable operator needs to be given an opportunity to defend
itself in case of any breach noticed against it.
3.9.10.4 In order to deter tendencies of violation of licensing terms and
conditions, licensing framework must prescribe adequate
penalties. The license should clearly set out what sanctions the
licensing authority/regulator may apply for non-compliance.
The range of sanctions includes fines, immediate suspension of
license, shortening or termination/cancellation of a license. The
amount of fine should take into account various factors such as
42
the seriousness of the breach, the licensee’s past record of
breaches, etc.
3.9.10.5 Accordingly, the Authority recommends
• The license should have a provision for termination/
cancellation of license if there is any breach of terms
and conditions of the license, or of the provisions of the
Cable Television Networks (Regulation) Act, 1995 or the
Rules made thereunder or TRAI’s regulations/
directions/orders. Such termination/cancellation of the
license shall be without prejudice to initiation of
appropriate proceedings against the licensee under the
relevant provisions of the Cable Television Networks
(Regulation) Act, 1995 or the Telecom Regulatory
Authority of India Act, 1997, as the case may be.
• Any breach of licensing terms and conditions (given in
Annex V) may be reported by the authorised officer,
entertainment tax and service tax authorities to the
concerned licensing authority (Senior Superintendent of
Post Offices (Division Head) for District Level licenses
and the Chief Post Master General of the State for State
level license).
• The licensing authority shall issue a notice to the
licensee and seek his explanation on the reported breach
of licensing terms and conditions giving him reasonable
time, not exceeding 15 days, and requiring him to show
cause as to why the license should not be
terminated/cancelled or why any penalty as
contemplated in the terms and conditions of the license
should not be imposed on the licensee.
43
• Upon receipt of the explanation of the licensee within
the time so allowed or if the licensee fails to respond to
such notice, after the expiry of the time so allowed, the
licensing authority shall take a final view in the matter
in accordance with the guidelines issued, by Ministry of
I&B/ TRAI from time to time, after taking into account
all the facts and circumstances of the case including the
explanation, if any, offered by the licensee and convey
its decision to the concerned cable operator in writing.
• In case of termination/cancellation of a license, but
there is no suspension of the license already in force,
the licensee shall be given one month’s time to close
down his operations and to suitably notify his
customers.
• In case of termination/cancellation/suspension of
license, the licensing authority shall intimate the same
to the authorized officer of the area for enforcing these
orders.
• The license for a local cable operator shall include, as
part of the terms and conditions of license, provisions
for levy of a penalty by TRAI or by licensing authority, of
upto Rupees one lakh for each violation of licensing
terms and conditions (as given in Annex V), where the
violations noticed do not fall under the classes of
violations warranting termination/cancellation of the
license, as indicated in the guidelines issued by the
Ministry of I&B or for violation of TRAI’s regulations/
directions/orders. The imposition of such penalty by
the TRAI shall be without prejudice to initiation of
appropriate proceedings against the licensee under the
44
relevant provisions of the Telecom Regulatory Authority
of India Act, 1997.
3.9.11 Migration of existing Cable TV operators
3.9.11.1 As mentioned earlier, there are approximately 60000 LCOs in
the country. In order to effect the systematic and planned
growth of Cable TV Networks, the existing cable operators have
to be brought under the proposed licensing regime.
3.9.11.2 The Authority recognises the services rendered by existing cable
operators and therefore it is of the view that license should be
given to all the existing Cable TV operators who have valid
Cable TV registration as on 31st March of the year in which
revised procedure is notified, on completion of all other
formalities.
3.9.11.3 All those functional cable operators who do not posses a valid
cable registration as on 31st March of the year, in which revised
procedure is notified, shall be treated as new applicants.
3.9.11.4 The Authority therefore recommends
• All existing valid Cable TV operators holding valid
registration would be permitted to migrate to new
license regime within a period of 12 months from 31st
March of the year in which the revised procedure is
notified or from the date of expiry of existing
registration, whichever is earlier.
• All existing Cable TV operators who have valid
registration as on 31st March of the year in which the
revised procedure is notified will be granted license on
receipt of application for license, requisite entry fee and
45
subject to fulfillment of other terms & conditions
prescribed in the license.
• Cable operators who do not possess a valid registration
as on 31st March in that year will be treated as new
applicants.
3.9.12 Subscriber complaint redressal mechanism
3.9.12.1 Presently there is no standard mechanism for subscriber
complaint redressal and guidance to subscribers for getting new
Cable TV connection. The Cable Television Networks
(Regulation) Act, 1995 and Cable Television Networks Rule 1994
also do not mention any specific mechanism for handling of
subscribers’ complaints. This sometimes results in long fault
durations, leading towards higher consumer dissatisfaction.
3.9.12.2 There is a need to have explicit provisions about the customers’
right including the redressal of consumer grievances. Some
consumer advocacy groups wanted well defined consumer
grievance redressal mechanism as they felt that present system
of customer complaint handling is not effective.
3.9.12.3 In order to effectively handle consumers complaints, the
Authority recommends
• Each LCO will provide the telephone number to all the
subscribers for making complaint. Such numbers must
be printed on the payment receipt.
• In case of a complaint from a subscriber, LCO will
o provide the complaint number
o Keep record of date & time of booking of such
complaints in a register.
o Treat the complaint as disposed of only after
confirmation from subscriber.
46
o Keep record of date and time of rectification of
such complaints in the register or in the electronic
form.
• Such records shall be maintained neatly and shall be
presented if asked by Authorized officer or any other
competent agency so prescribed.
3.9.13 Subscribers’ billing
3.9.13.1 Presently many Cable TV operators maintain cards for the
purpose of keeping the record of collection of monthly
subscription fee from its subscribers. There are complaints that
no monthly receipts are given to the customers for the
subscription given by them. Cable TV operators charge a
monthly consolidated amount from their consumers and it does
not clearly reflect separate charges for the service and
applicable taxes on different heads.
3.9.13.2 Cable TV operators are required to pay entertainment tax and
service tax, which are linked to the number of subscribers. The
Consolidated amount charged from consumers does not give
any details. Firstly receipt is not provided. Even if they provide
receipt, it does not clearly reflect separate charges related to
service and applicable taxes. In such a scenario Cable TV
operators may evade taxes by under declaring their subscribers.
3.9.13.3 TRAI in the Telecommunication (Broadcasting and Cable)
Services (Second) Tariff (Eighth Amendment) Order, 2007, dated
4th October 2007, has stipulated the requirements of
mandatory billing with necessary details and issue of receipts
for payments made. However, details of impact of
implementation are not available at present. There is a need to
47
develop a proper system of billing and monitoring so that the
taxes can be regularly collected.
3.9.13.4 In view of above, the Authority recommends
• LCO shall maintain the details of its subscribers.
• LCO shall provide receipts for payments received from
subscribers as specified by TRAI from time to time. Such
receipts must be serially numbered and bear name,
telephone number, Service Tax number and
Entertainment Tax number (if applicable) of LCO.
• Such receipt should provide details of subscription
charges & taxes separately.
3.9.14 Quality of Service
3.9.14.1 In India, Cable TV has developed in a lightly regulated
environment and has registered impressive growth. However,
this unregulated growth of the industry is likely to impact
quality of services, if it not properly regulated.
3.9.14.2 TRAI in its recommendations on “Issues relating to
Broadcasting and Distribution of TV channels” dated 1st
October 2004 suggested certain QoS codes and guidelines for
the Cable TV industry, which included Information to be
provided to consumer at the time of installation of cable TV
connection, Complaint handling procedure, benchmarks to
redress complaints and Billing Procedure (refer Annex-III). TRAI
also issued Regulation on the Standards of Quality of Service
(Broadcasting and Cable services) for Cable TV in CAS areas on
23rd August 2006 and Regulation on Quality of Service and
Redressal of Grievances for Direct to Home Broadcasting
Services on 31st August 2007. TRAI is responsible to issue QoS
48
regulation and may consider the same for non CAS areas at
appropriate time. The technical parameters for Cable TV
transmission have already been prescribed by Bureau of Indian
Standards from time to time, and these need to be followed by
Cable TV operators.
3.9.14.3 In view of above, The Authority recommends
• The licensee shall abide by section 9 of Cable Television
Network (Regulation) Act 1995, relating to use of
standard equipment in Cable TV Networks.
• Licensed cable operators should comply with BIS
Standard IS – 13420, Part I (Revised) relating to system
performance, and ensure delivery of proper signal at
subscriber premises as given under:
o C/N > 44 dB o Minimum Carrier level 60 dB(µV) o Maximum Carrier level 80 dB(µV) o Slope < 12 dB o X-Mod > 57 dB o CSO > 57 dB
C/N – Carrier to Noise ratio
CSO - Composite Second Order Interference
X-Mod – cross modulation
Slope is caused by ‘SKIN EFFECT’, wherein signal attenuation increases with frequency of the channel
(Parameters mentioned above are indicative only and subjected to any change by BIS from time to time without any notice)
3.9.15 Other Licensing conditions
3.9.15.1 Apart from specific licensing issues as discussed earlier, there
are other issues related to LCOs such as data collection. This
section covers general issues related to Cable TV sector.
49
3.9.15.2 Data collection of LCOs
3.9.15.2.1 Data collection related to licensed LCOs is very important for
supervisory guidance and proper regulation of the Cable TV
sector. The present mechanism of data collection seems to be
inefficient as any authenticated details regarding number of
LCOs, their location their areas of operation and the validity
of their registrations are not readily available. Unconfirmed
industry reports indicate that the number of operational
LCOs is higher than the registered LCOs. This not only
impacts the proper regulation of the Cable TV sector but also
results in revenue loss to the government.
3.9.15.2.2 The regulation of LCOs through proper licensing by clearly
demarcating their area of operation will be important to
attract capital investments in the sector, develop effective
consumer grievance redressal mechanisms and curb
anarchy in the sector. These issues have been kept in mind
while framing the licensing conditions & procedure for LCOs
in previous section. With new licensing framework
envisaged, licensing authority shall be in best position to
provide authenticated data on LCOs.
3.9.15.2.3 Data collection in respect of LCOs is a difficult task in view
of the fact that number of LCOs is very high (approximately
60000) and they are scattered in large geographical area
throughout the country. Since the Senior Superintendent of
Post Offices of concerned Postal Division is being given the
responsibility to give license to LCOs, he will maintain the
record of the licensed LCOs as per the format given at
annexure IV. All the Senior Supdts. of Post Offices will make
adequate arrangements to give such information to Ministry
of I&B and TRAI as and when required. This information will
50
also be available to any stakeholder on payment of the
prescribed fee as may be decided by Ministry of I&B from
time to time. This is being recommended to bring
transparency and ease of availability of information, which
may also be required for development of Cable TV sector as a
whole.
3.9.15.2.4 As recommended earlier, the Postal Department will be
provided administrative charges by way of levy of
administrative cess (at the rate of ten per cent of entry fee
and renewal fee as discussed earlier) to meet the
administrative expenses in order to carry out the licensing
data reporting and monitoring work.
3.9.15.2.5 In view of above, the Authority recommends
• The Licensing Authority will maintain the records of the
licensed LCOs as per the format given at annexure IV.
• The Licensing Authority will make adequate
arrangements to furnish such information to Ministry of
I&B and TRAI in such form and at such intervals as
desired by them.
• The Department of Post will be provided administrative
charges by way of levy of administrative cess (at the rate
of ten per cent of entry fee and renewal fee as discussed
earlier) to meet the administrative expenses in order to
carry out the licensing data reporting and monitoring
work.
3.9.15.3 Right of Way (RoW)
3.9.15.3.1 Cable TV operators lay cables in their area of operation for
provisioning of service to their consumers. Presently Cable
TV operators mostly rely on hanging the cables over the roof
51
tops and electric & telephone poles. This adversely affects
the safety as well as aesthetic look of the area as several
cables hang improperly on electric and telephone poles.
However, the Cable TV operators have no alternative because
they are not entitled to seek right of way (RoW) in many
states. It is sometimes argued that as Cable TV Operators
are not licensed under Section 4 of the Indian Telegraph Act
1885, they are not eligible for seeking RoW. Some State
Governments or utilities ask Cable TV operators to pay large
amount for hanging the cables on electric poles etc. These
charges vary from state to state and district to district. There
is a need to make provision for non-exclusive permission to
Cable TV operators for laying the cables in a structured
manner over poles/ underground. Overhead cables are more
prone to fault due to improper installation and also they are
exposed to extreme weather conditions. Sometimes overhead
cable is stolen or even cut down by rival operators. This not
only affects the QoS, but also causes disruption of services.
Such environment is not conducive for digitalisation of
networks. The cost to provide digital cable services per user
can be brought down substantially in case service from a
digital head end is supplied to a larger area through optical
fibre cable network.
3.9.15.3.2 TRAI has already recommended in its recommendations on
“Digitalisation of Cable Television” dated 14th September,
2005 that licensee of digital transmission systems be
provided Right of Way on the lines of provisions contained in
The Communication Convergence Bill 2001 by making
appropriate amendments in the Cable Television Networks
(Regulation) Act, 1995.
52
3.9.15.3.3 The stakeholders were unanimous to demand RoW for laying
Cable TV Networks. They explained various adverse
situations at ground level and wanted urgent action on this
account.
3.9.15.3.4 As the LCOs will be required to seek license for operation of
their Cable TV Network. They may be entitled to see Right of
Way.
3.9.15.3.5 In view of above discussions, the Authority recommends
• Cable TV operators shall be made eligible for seeking
RoW for laying Cable/Optic fiber both underground as
well as over poles on non exclusive basis.
• Concerned State Governments/ local bodies may
consider formulating a RoW policy for Cable TV
operators.
• Ministry of I&B may initiate a dialogue with the State
Governments to facilitate the formulation of uniform
RoW policy for Cable TV operators.
3.9.15.4 Addressability related issues
3.9.15.4.1 Generally the Cable TV operators in Non-CAS area are not
properly maintaining records of subscribers, channels given
to different subscribers, billing details etc.
3.9.15.4.2 The absence of addressability makes the situation more
complex and leads to certain forms of market aberrations.
Addressability is most crucial issue and frequently results in
legal disputes. There are complaints from LCOs that
broadcasters insist on certain minimum guaranteed
connectivity levels and insist on enhancement of the
53
subscribers’ base frequently. The broadcasters complain that
LCOs do not declare their full subscriber base. The exact
determination of subscribers’ base is almost impossible in
absence of addressability. Tax authorities are also concerned
with actual revenue potential since taxation is related to the
number of the subscribers served.
3.9.15.4.3 The growth of DTH, HITs and IPTV may churn the
subscribers of cable operators. The present RIO between
local cable operators and MSOs is mostly on negotiated
subscriber base. There is no method in Non CAS area to
determine degree of churning and effective subscriber base.
In such a situation while LCOs may insist on reduction of
subscriber base in view of likely churning of subscribers,
MSOs may insists on increase of the subscriber base to
increase their revenues. Therefore there is an immediate
case for establishing an effective verifiable record system.
3.9.15.4.4 There is a need to develop a proper system to effectively
audit and verify subscriber base.
3.9.15.4.5 In view of above, it is desirable that LCOs maintain details of
the subscribers in auditable form. The MSOs shall
incorporate provision in RIO to review the subscriber base of
such LCOs once in six month where such auditable
subscriber base has been maintained. The LCOs should get
relief if the subscriber base has declined. Also the additions
must influence the obligation of LCO to pay higher
contribution to MSO. This can be effected annually or six
monthly as per RIO.
54
3.9.15.4.6 Preparation of such database shall be useful for monitoring
purposes and to ascertain actual tax potential.
3.9.15.4.7 In view of above discussions Authority recommends
• Every Cable TV operator should be required to maintain
a register giving details of its subscribers, details of bills,
details of tax collected and paid with date, in verifiable &
auditable form. LCOs will produce this register for
examination by concerned enforcement agencies (such
as the authorized offers, authorized functionaries of the
Departments of the Government concerned with
entertainment tax, service tax, etc.) as & when required.
• The MSOs shall incorporate provision in RIO to review
the subscriber base of such LCOs on half yearly basis
where such auditable subscriber base has been
maintained.
• Every Cable TV operator will submit an annual statement
to the authorized officer giving details of its subscribers,
specific area of operations etc.
3.9.15.5 Content related responsibility in the case of signals
received from MSOs
3.9.15.5.1 Cable TV operators are permitted to show broadcast
television signals as defined in the Cable Television Network
(Regulation) Act, 1995 and are required to adhere to the
program code, the advertisement code and other guidelines
issued from time to time. Majority of the content shown by
Cable TV operators are TV channels obtained from
broadcasters. For broadcasting of TV channels broadcasters
are already bound by the up-linking/ down-linking
guidelines. However MSOs too sometimes distribute local
55
news & video channels to Cable TV operators. These
channels are not obtained from broadcasters; therefore such
channels are not subjected to up-linking/ down-linking
guidelines. However, these channels are subjected to the
program code, the advertisement code and other such
guidelines issued from time to time. MSOs are responsible
for content of such local channels. Apart from TV channels
from broadcasters & MSOs, Cable TV operators can also
show locally developed content.
3.9.15.5.2 For all content and channels obtained from
broadcasters/MSOs; responsibility must completely rest with
broadcaster/MSO as regard to provisioning of such content
to end-users. It has been contested by LCOs during
discussions that even for content related violation by
broadcasters/MSOs, Cable TV operators are being penalized.
In their view Cable TV operators should be held responsible
for observing program code and advertisement code only for
content produced by them or transmitted by them locally
and they should not be held responsible for content being
provided by MSOs/broadcasters.
3.9.15.5.3 The authorized officer is empowered to prohibit transmission
of certain programmes in public interest and impose
penalties as per the existing provisions of section 19 of the
Cable Television Network (Regulation) Act, 1995. However,
some of the stakeholders mentioned that it is not technically
feasible to block any particular channel through their
system, if the signal feed is being received from the MSO.
56
3.9.15.5.4 Accordingly, the Authority is of the view that an LCO shall
block the transmission of channel as per instructions of the
authorised officer to the extent possible subject to technical
feasibility. In case it is not technically feasible to block the
content of a particular channel by LCO, the District
administration will decide the future course of action in
consultation with LCO and MSO concerned.
3.9.15.5.5 Some of the stakeholders pointed out that DD channels are
not being carried by many MSOs and LCOs in prime bands
and the quality of signals is not of the requisite standard
though it is mandated by clause 8 of the Cable Television
Network (Regulation) Act, 1995. It was suggested that
officers preferably from Prasar Bharti may be permitted to
inspect the office premises, equipment and set up of
LCOs/MSOs to monitor the mandatory carriage of notified
DD Channels in the prime bands. The inspection report
would be submitted to the concerned authorized officer of
the area.
3.9.15.5.6 The Cable Television Network (Regulation) Act, 1995 defines
authorised officer and casts responsibility for effective
implementation of the provisions stipulated in the Cable
Television Network (Regulation) Act, 1995. Section 11 to 20
of the Cable Television network (Regulation) Act, 1995
defines the powers and penalty provisions of the authorised
officer. Carriage of the DD channels is one of the provisions
to be monitored and implemented by the authorised officers.
In order to strengthened the effective compliance of section 8
of the Cable Television Network (Regulation) Act, 1995,
Prasar Bharti officers (Assistant Engineer and above) may
57
inform authorised officer wherever it comes to their notice
that provisions of section 8 are being violated. It will be
incumbent on part of authorised officer to take immediate
necessary action and ensure compliance of the provisions of
the Cable Television Network (Regulation) Act, 1995.
3.9.15.5.7 Some of the stakeholders mentioned that LCOs transmit
local community based programmes through their local
ground based channels. These channels are very effective in
showing functions of schools, various local bodies and
important messages from District administration during
natural calamities like flood, earth quake, tsunami etc. It
was also mentioned that LCOs also earn revenues through
advertisements on such local channels making a viable
business model for them.
3.9.15.5.8 In light of the above, the Authority is of the view that
LCOs may also be permitted to transmit their ground based
channels, which will be subjected to Program code,
Advertisement code as prescribed in the Cable Television
Network ( Regulation) Act, 1995 and any other instructions
issued by Ministry of I&B from time to time. Ministry of I&B
is requested to issue guidelines for provision of ground based
channels by LCOs.
3.9.15.5.9 The Authority recommends
• LCOs shall not be responsible for the content provided
by MSOs/ Broadcasters, but they will effectively block
such content whenever they are required to do so by the
authorized officer under section 19 of the Cable
Television Networks (Regulation) Act, 1995 subjected to
58
technical feasibility. In case it is not technically feasible
to block the content by LCO, the LCO shall immediately
inform the same to the authorised officer. The
authorised officer will decide the future course of action
in consultation with LCO and MSO concerned.
• LCOs shall be permitted to transmit their ground based
channels, which will be subjected to Program code and
Advertisement code as prescribed in the Cable Television
Network (Regulation) Act, 1995 and any other
instructions issued by Ministry of I&B from time to time.
Ministry of I&B is requested to issue detailed guidelines
for provision of ground based channels by LCOs.
• District Magistrate will have full powers to immediately
stop the privilege to transmit local ground based
channels by any LCO at any point of time in public
interest. Transmission of such ground based channels
will have to be discontinued immediately.
• In order to ensure mandatory carriage of notified DD
Channels in the prime bands, officers of the rank of
Assistant Engineer and above from Prasar Bharti may
inform authorised officer wherever provisions of section
8 of the Cable Television Network (Regulation) Act, 1995
are being violated. It will be incumbent on part of
authorised officer to take immediate necessary action.
3.9.15.6 Encouragement for digitalisation
3.9.15.6.1 Most of the cable operators are providing Cable TV service
using analog medium at present in non CAS area. The
emphasis is now shifting to digital transmission from
existing analog transmission. With the advancement of
technology Cable TV operators may like to provide Internet,
59
Internet telephony and other interactive value added service
like Video on Demand (VoD), Interactive TV, Time shifted TV
& Interactive gaming etc after obtaining appropriate license/
permission. For this purpose Cable TV operators are
required to upgrade their existing network. It is advocated
that such upgradations will require detailed network
planning and significant expenditure. Unless suitable
business model is conceived, the existing Cable TV operators
may not upgrade their network and find it difficult to
compete in changing environment.
3.9.15.6.2 Telecom service providers are likely to start providing triple
play services which may include IPTV, VoD, etc. Other
platforms like Direct to Home (DTH), HITS, and Mobile TV
are likely to be available and competing in the same
segment. In order to compete and co-exist, it will be
necessary that Cable TV operators upgrade their network.
3.9.15.6.3 TRAI while fixing the tariff ceiling for non-CAS area have not
put any embargo on Cable TV operators providing
addressable digital signals in non-CAS areas. This is a step
to encourage Cable TV operators to upgrade and digitalise
their networks. Services like IPTV have also been permitted
to Cable TV operators.
3.9.15.6.4 The digitalised cable networks with two way transmission
capability will be very useful for provisioning of broadband
and other value added services over it after obtaining
appropriate license. The government is concern to increase
the broadband penetration in rural and remote areas.
Universal services Obligation fund (USOF) may provide
certain subsidy/ other support to ISPs to provide broadband
60
services in rural and far flung areas. It is envisaged that
similar subsidy shall be extended to such cable TV operators
also who shall be providing the broadband in these areas
and fulfill terms and conditions laid by USOF. No
discrimination shall be done based on the type of network
and technology used to provide a particular service.
3.9.15.6.5 It was also suggested by the stakeholders that digitalisation
and voluntary CAS activities can be boosted if price of such
digital channels in non CAS areas are also regulated. It is
argued that since TRAI has already provided framework to
determine each broadcast channel price for addressable
systems, similar pricing may also be extended to non CAS
areas to Cable TV operators providing voluntary CAS.
3.9.15.6.6 It was also argued that digitalisation in India must be
encouraged. Some stakeholders felt that digitalisation must
be driven through regulations.
3.9.15.6.7 The pricing of channels is regulated by the
Telecommunication (Broadcasting and Cable) Services
(Second) Tariff (Eighth Amendment) Order, 2007, issued by
TRAI on the 4th October, 2007 and is not covered under the
present reference.
3.9.15.6.8 Some other stakeholders mentioned that the broadcasters
are not willing to provide their signals on the digital platform
to the LCOs and MSOS, who are voluntarily digitalizing their
network/headend. It was also mentioned that agreements
signed by broadcasters with MSOs/LCOs clearly prohibits
transmission of their channels on digital platform.
61
3.9.15.6.9 The Authority has viewed this very seriously and is of the
opinion that any constraint affecting the digitalisation of
cable TV sector should be immediately removed.
3.9.15.6.10 In view of the above, the Authority recommends that
� Each broadcaster shall provide signals on digital
platform to LCOs and MSOs, who are voluntarily
digitalizing their networks.
• The new LCOs may be mandated to digitize their
networks in three years from date of issue of license as
part of their performance obligations.
• Existing LCOs may be mandated to digitize their
network in five years from the date of notification of
new licensing regime.
• Digitalisation shall imply stopping of analog
transmission altogether including Free to Air Channels.
• No license for new LCOs will be given for analog
transmission from a date, which will be five years from
the date of such notification.
• LCOs providing the broadband services after obtaining
appropriate license in rural and far flung areas using two
way digitalised cable networks shall be entitled for USOF
subsidy/ support given to telecom operators for
providing similar services if they fulfill terms and
conditions laid by USOF. No discrimination shall be done
based on the type of network and technology used to
provide a broadband service.
3.9.15.7 Foreign Direct Investment (FDI)
3.9.15.7.1 Presently, the cable infrastructure in the country is
predominantly one way analog network. This has resulted in
62
limitation on channel carrying capacity of the network and is
limited to use for carriage of TV channels only. There is
increasing convergence of technologies in telecom and
broadcasting sectors. Technically, it is possible for cable TV
networks to provide voice telephony and broadband
(including Internet). Upgradation of cable TV networks would
help in spreading broadband penetration and other telecom
services in the country. To harness the advantages of
advancement in technology, it is very important to upgrade
the existing cable infrastructure in the country and augment
its capacity by digitalisation and increasing use of optical
fiber links. This would require large amount of investment as
well as technological inputs.
3.9.15.7.2 Although numerically the number of households receiving
cable television services in the country is very large (about
78 million households), technologically, the country is
trailing behind other advanced countries, where the cable
networks are digital two-way networks which support triple
play services.
3.9.15.7.3 An estimate of the investment required for digitalisation of
cable television networks in the country was given by the
Authority in its recommendations on Headend-In-The-Sky
(HITS) sent to the Government on October 17, 2007. Extracts
of the relevant para of the recommendations are as under:-
“2.25 …If such a vast cable network, serviced by 6000 MSOs
and nearly 60,000 last mile cable operators, is to be digitalised in a conventional manner by setting up digital headends for each MSO in each city/town, then it will require an investment of more than Rs 15,000 crores, apart from a very long time required for the same…”
63
3.9.15.7.4 This estimate of Rs. 15,000 Crores is for the cost of
conversion of existing one way analogue cable network to
one way digital cable network. If the cable networks are to be
upgraded to two-way 750-850 MHz broadband digital cable
networks, then the cost of upgradation would work out to a
still higher amount. This cost has been estimated in the
range of US$ 200 per home in publications by Media
Partners Asia, Ltd., STAR Group, Macquarie Media Group
and Liberty Global, Inc. This cost covers an upgrade to a
two-way 750-850 MHz broadband digital cable network;
cable modem deployment, and merger and acquisition
related costs relating to last mile consolidation. This would
translate into a sum of Rs. 64,000 Crore for 80 million cable
homes in the country (at a conversion rate of Rs. 40 per
US$). Thus, it is clear that enormous amount of investment
is required for upgrading the cable networks in the country.
3.9.15.7.5 Some of the stakeholders have advocated the increase in FDI
limit in the cable TV sector to 74% from existing limit of 49%
emphasizing that if the FDI limit is not enhanced, it will have
catastrophic impact on the industry, where MSOs and LCOs
will be mandated to migrate to full digitalisation without
financial backing.
3.9.15.7.6 The Authority in its recommendation on “Foreign
Investment Limits for Broadcasting Sector” dated 26th
April 2008 has already recommended enhancement of
FDI limit from present level of 49% to 74% to meet the
requirement for the upgradation of the cable network
cost. This will be necessary to boost the cable TV sector
64
for bringing in addressability and technological
advancement. It is envisaged that enhancement in FDI
limits will be implemented in case of LCOs on priority
basis. Also it will be unfair to cable TV sector if other
transmission modes are being permitted 74% FDI.
3.9.15.8 Amendment in the Cable Television Networks (Regulation)
Act, 1995 and the Rules framed thereunder
3.9.15.8.1 Presently the Cable TV operators are regulated as per the
provisions of the Cable Television Networks (Regulation) Act,
1995 (7 of 1995) and the Cable Television Networks Rules,
1994. Para number 3.8, 3.9.2.4, 3.9.3.5, 3.9.4.4, 3.9.5.3,
3.9.6.2, 3.9.7.7, 3.9.8.5, 3.9.9.4, 3.9.10.5, 3.9.12.3, 3.9.13.4
3.9.15.4.7; 3.9.15.5.9, 3.9.15.7.6 of the recommendations
made in this chapter would require amendment in the Cable
Television Networks (Regulation) Act, 1995 and the Rules
framed there under. The para numbers given above are
indicative and not exhaustive. Consequential amendment
may also be made appropriately in Cable TV Networks
(Regulation) Act 1995 and Cable TV rules there under in
view of above recommendations.
65
Chapter 4
Licensing Framework relating to Multi System Operators
(MSOs)
4.1 The number of broadcasters were limited initially when cable TV
services were started. The cable TV operators used to install small
number of dish antennae for receiving signals from different
broadcasters. The ever increasing number of broadcasters forced
the cable TV operators to install multiple dish antennas. The huge
space requirement to install multiple antennae favored content
aggregator, resulting in entry of Multi System Operators (MSOs).
These MSOs have established their headends for receiving signals
from broadcasters and distributing it signals to cable TV operators.
Cable TV operators either became their franchisee or had
commercial agreements with them.
4.2 Presently an MSO is registered as a cable TV operator though their
operations and business model is different as discussed in chapter
3. Still, there is no separate framework for registering and
regulating MSOs in non CAS areas. Functioning, responsibilities
and the volume of investment required for an MSO necessitate a
separate regulatory framework for MSOs.
4.3 Definition of Multi System Operator (MSO)
4.3.1 There is no separate definition of “Multi System Operator (MSO)” in
the Cable Television Networks (Regulation) Act, 1995. Presently,
MSOs are registered as “cable operators” under the Cable
Television Networks (Regulation) Act, 1995. However, the Cable
Television Networks Rules, 1994 contains a definition of “Multi
System Operator (MSO)” which reads as under:-
66
“Multi-System Operator (MSO)” means a cable operator who
receives a programming service from a broadcaster or his
authorized agencies and re-transmits the same or transmits his
own programming service for simultaneous reception either by
multiple subscribers directly or through one or more local cable
operators (LCOs), and includes his authorized distribution
agencies by whatever name called;”
4.3.2 The draft Broadcasting Services Regulation Bill 2007 also defines a
“Multi System Operator” and “Multi-System Cable Television
Network” as under:-
“Multi System Operator (MSO)” means any person who manages
and operates a multi-system cable television network to provide a
cable television service to multiple subscribers, which may or
may not include other value added services including
telecommunications and Internet;” .
“Multi-System Cable Television Network” means a system for
multi-channel downlinking and distribution of television
programmes by a land based transmission system using wired
cable or wireless cable or a combination of both for simultaneous
reception either by multiple subscribers directly or through one or
more local cable operators;”.
4.3.3 As per above definitions, an MSO can also provide services directly
to subscribers. However, the function and nature of business of an
MSO is entirely different. The MSO’s main function is to aggregate
content from different broadcasters and to provide it to the LCOs.
Therefore, the regulatory framework for the MSOs should be
different from LCOs. However, MSO can get a separate license as a
“cable TV operator” and provide services to customers also.
67
Unambiguous definition of MSOs will demarcate responsibilities
and functional areas of MSOs and reduce likely disputes between
MSOs and LCOs.
4.3.4 The Authority is of the view that MSO may be clearly defined in the
Cable Television Networks (Regulation) Act, 1995. Accordingly,
the Authority recommends
Adoption of following definition of Multi System Operator
(MSO) and Multi-System Cable Television Network in the
Cable Television Networks (Regulation) Act, 1995:
• “Multi System Operator (MSO)” means any person who
manages and operates a multi-system cable television
network to provide cable television service to one
/multiple local cable TV operator(s) or to any other
distribution platform permitted and licensed by the
Government”.
• “Multi-System Cable Television Network” means a
system for multi-channel downlinking and distribution of
television programmes by a land based transmission
system using wired cable or wireless or a combination of
both”.
4.4 Service Area
4.4.1 As per the provisions of the Cable Television Networks (Regulation)
Act, 1995, an MSO (who is essentially “a cable TV operator” under
the present disposition) can provide signals within the area of
jurisdiction of the Head Post Office in which he is registered. There
are several multi-city MSOs, which require registration in multiple
post offices. Monitoring and compilation of data in respect of such
MSOs is difficult. Sometimes, an MSO situated in the bordering
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area of a district may provide feed to an LCO situated in the
bordering area of another district where no other MSO is available.
This situation may be prevalent in rural and semi-urban areas.
4.4.2 MSOs play an important role in aggregating and providing contents
including ground based channels. Stakeholders are also of the view
that MSOs must be registered separately and there should be no
ceiling on number of MSOs in any service area.
4.4.3 Looking at the functionality and business model of the MSOs, a
sufficiently large service area will not only attract financially and
technically sound entities but will also enable digitalisation and
increased availability of MSO signals in uncovered and rural areas.
In order to promote effective competition, there should be no
restriction on the number of MSOs in any particular service area
and MSO license shall be given on a non-exclusive basis.
4.4.4 In view of above, the Authority recommends
• The license area of an MSO may be the area of a revenue
district, geographical boundaries of a State or the entire
country as a whole, as the case may be.
• There will be no restriction on the number of MSOs in
any particular area. MSOs will be permitted to operate
anywhere within the service area of their license as per
their business plan, without any roll out obligations.
4.5 Definition of person and eligibility
4.5.1 Present regulatory framework treats MSOs at par with LCOs. There
is no separate definition of “Person” for MSOs in the Cable
Television Networks (Regulation) Act, 1995.
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4.5.2 The definition of person has been [proposed for LCO In para 3.9.2
in the previous chapter. Same definition may be adopted for MSOs
also.
4.5.3 Looking at the functioning, responsibilities and the volume of
investment required for a MSO, it is expected an individual or an
association/body of individuals or a company can effectively
function as district level MSO; but state level and country wide
MSO licenses shall be preferred by a company. As digitalisation
spreads, the quality of service responsibilities will shift more and
more from LCOs to MSOs. In such a scenario, a well structured,
financially & technically sound entity such as a company will be
suitable to carry out the business of a MSO at the State or across
the country.
4.5.4 Accordingly, the Authority recommends
• For the license of MSO, the eligible “person” will be
� An individual who is a citizen of India;
� An association of individuals or body of
individuals, whether incorporated or not, whose
members are citizens of India;
� A company as defined in section 3 of the
Companies Act, 1956 (1 of 1956) with such
eligibility conditions as may be specified by the
Central Government;
• License for Multi System Operator (MSO) will be granted
only to an Indian company as defined in section 3 of the
Companies Act, 1956 (1 of 1956) with such eligibility
conditions as may be specified by the Central
Government) as far as state level or country wide
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licenses are concerned. However, licenses for district
level operations can be granted to a “person” as per the
proposed definition.
4.6 Licensing Authority 4.6.1 MSOs at present need to register as ‘cable TV operator” as per the
Cable Television Networks (Regulation) Act, 1995.
4.6.2 Since MSOs are effectively working as content aggregators and
content is regulated by Ministry of Information and Broadcasting
(MIB), it will be desirable that MSOs are licensed by Ministry of
Information and Broadcasting (MIB) or an agency under it. MIB
may work out its own administrative arrangements to grant license
to MSOs at different levels. One such option could be to use the
Press Information Bureau as their infrastructure is present in all
State Capitals. We may note that permissions to MSOs operating
in CAS notified areas have been granted by Ministry of I&B under
the Cable Television Networks Rule, 1994.
4.6.3 Accordingly, the Authority recommends
• Licenses to MSOs shall be granted by Ministry of
Information & Broadcasting (MIB) either directly or
through any other administrative unit under its direct
control. One such arrangement could be through Press
Information Bureau (PIB).
• Ministry of I&B may clearly define the licensing
authority for MSOs desirous to operate at the district,
state and country level.
• Ministry of I&B will allot a unique code/ registration
number to every such licensee. The structure of unique
code should consist of separately identifiable digits for
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particular state code, area code, MSO’s unique code and
validity. This will facilitate computer based scrutiny of
MSOs and renewals of their licenses.
• Any MSO, who desires to work as LCO, shall have to
apply to the concerned licensing authority for grant of
such license separately.
4.7 List of documents to be submitted along with application 4.7.1 A comprehensive list of documents to be submitted along with the
application form for MSO license will be desirable to bring in
transparency. Looking at functioning and responsibilities of MSOs,
proper scrutiny of the antecedents of the applicants will be
desirable. The licensing authority will check all such documents
before granting the license. This will ensure that license is granted
to only those entities who fulfill eligible conditions.
4.7.2 The Authority accordingly recommends
• A “person” desirous to get MSO license shall submit
following documents along with the required entry fee to
appropriate licensing authority:
(a) In case of individual – (i) ID proof (ii) Proof of residence (iii) PAN number (iv) Copy of current Income Tax Return (v) Service Tax registration number (If the number is
not available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of license)
(vi) Affidavit stating that he has not been convicted for any criminal offence
[Note: Individuals convicted for any criminal offence
shall not be eligible for the license]
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(b) In case of association or body of individuals – (i) Document by which the association or body of
individuals has come into existence, including address and other details
(ii) PAN number (iii) Copies of current Tax returns for Income Tax and
Service Tax. In case of newly constituted association or body of individuals which have not filed any such returns, the Service Tax registration number will be submitted (If the number is not available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of license).
(c) In the case of companies, - (i) A copy of the certificate of incorporation of the
company along with copies of the Memorandum of Association and Articles of Association.
(ii) PAN number (iii) Copies of current returns for Income Tax and
Service Tax. In case of new companies which have not filed any such returns, the Service Tax registration number (If these numbers are not available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of licence).
[Note: Any change in the Memorandum of Association and/or Articles of Association shall be intimated to the licensing authority within seven days of such change.]
(iv) Entertainment Tax registration number (v) Details of CEO & other directors (vi) Details of proposed network architecture (vii) Proof of networth in the form of certificate from
the statutory auditor. 4.8 Duration of License 4.8.1 MSOs typically develop a long term business relationship with the
broadcasters and the LCOs. Any business plan becomes viable
only if it is implemented for duration appropriate for that business.
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A long term business plan also facilitates the inflow of investment
in any sector.
4.8.2 Accordingly, the Authority recommends
• The duration of MSO license shall be 5 years for all the
three types of licenses (i.e. District level, State level and
country level).
4.9 Entry Fee
4.9.1 MSOs have to make substantial investment for setting up their
headends and to spread their network. In addition they may also
provide content through ground based channels. This may require
significant responsibility on part of the MSOs and warrants that
only serious and financially sound entities should enter in this
sector. Accordingly entry fee should be such as to restrain non-
serious player from entering into this field. At the same time, the
entry fee should not be so high that it becomes a barrier for
existing MSOs.
4.9.2 Stakeholders’ comments have also been received to reduce the
entry fee of LCOs and MSOs in regions like north East, J&K etc. It
was pleaded that operations of cable TV networks in such areas
may be commercially less viabile due to geographical conditions,
low population, difficult terrain and socio-economic background
etc. Therefore reduction in the entry fee has been suggested.
4.9.3 It may be noted that NE and J&K regions are classified as special
category states for plan purposes considering various socio-
economic parameters. An encouragement for the development of
cable TV network in such areas may be desirable for the limited
period. In view of the above, the authority is of the view that 50%
reduction in the entry fee for MSOs may be granted for application
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received during the initial period of three years from the date of
notification of this revised licensing framework. The decision may
be reviewed after three years by Ministry of Information and
Broadcasting.
4.9.4 In view of above, the Authority recommends
• The entry fee for district level MSO license shall be Rs.
100,000 and networth will be Rs. 5 lakhs.
• The entry fee for state level MSO license shall be Rs. 10
lakhs and networth will also be Rs. 10 lakhs.
• The entry fee for country Level MSO license shall be Rs
25 lakhs and networth will also be Rs. 25 lakhs.
• There will be no annual license fee.
• The entry fee for MSOs providing services in NE and J&K
region may be reduced to 50% for applications received
during initial period of three years from the date of
notifications of new regime. This may be reviewed after
three years by Ministry of Information and Broadcasting.
4.10 Timeframe for grant /refusal of license 4.10.1 In a well organized regulatory framework, the approval process
for a license should be reasonable and definite in reference to
time frame. In the absence of a prescribed time limit for
grant/refusal of license, it may happen that licensing authority
neither grants the license nor communicates any reasons for
rejection to the applicants. Such a situation is undesirable and
may hamper the business plan of an applicant aspiring to start
operations as an MSO.
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4.10.2 In case of refusal, the reasons for the refusal should be clearly
communicated to the applicant within the stipulated time. There
should also be a provision for appeal in case of refusal of a
license to an applicant.
4.10.3 In view of the above, the Authority recommends
• Licensing authority shall convey grant/refusal of license
to an applicant within 3 months from the date of the
receipt of the application complete in all respects. In
case of refusal, the reasons shall be communicated to
the applicant within this stipulated time frame.
• Ministry of I&B will also designate specific appellate
authorities for entertaining appeals against refusal by
the licensing authorities. The procedure for filing appeal
shall be in addition to, and not in derogation of any
other law for the time being in force.
4.11 Renewal process 4.11.1 Since considerable investments are required by MSOs to start
operations, a definitive renewal process is desirable for long term
viable business plans. While easy license renewal framework
may be desirable, renewal process should also take into
consideration the status of compliance of license conditions by
licensees. The licensee must start renewal process well in
advance so that sufficient time is available to collect pre-
requisite information and take informed decision.
4.11.2 In view of the above, the application for renewal of license should
be made at least 3 months before the date of expiry of a current
license. On receipt of application, Ministry of Information and
Broadcasting or its designated agency will follow a suitable
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verification procedure as regards breach of terms and conditions
of license, if any, on the part of the concerned licensee. Based
on the results of such verification, the licensing authority will
take an informed decision. In case the licensing authority is
notified of serious breach of licensing conditions, then the
request for renewal of the license shall be withheld and a show
cause notice shall be communicated to the concerned MSO. The
decision on show cause notice shall be taken in six weeks. The
concerned MSO can appeal to the appellate authority within 30
days from the date such decision is conveyed, in case renewal is
denied.
4.11.3 The Authority accordingly recommends
• MSO shall apply for renewal of License to licensing
authority atleast three months before the date of expiry
of license.
• Every MSO shall submit following documents alongwith
application for renewal of license:
o Copy of current Income Tax, Entertainment tax
and Service Tax returns filed;
o Details of the authorised officer to whom the
licensee is reporting;
o Self certification that the licensee has neither been
penalized nor debarred by authorized officer from
providing service for any breach of licensing terms
and conditions or any other unlawful activity.
• Ministry of I&B or its designated agency shall follow a
suitable verification procedure as regards breach of
terms and conditions of license, if any, on the part of the
concerned licensee.
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• Licensing Authority shall renew the license for further
period of 5 years on receipt of applicable fee (Rs
100,000/- for district level, Rs 10 lakhs for state level
and Rs. 25 lakhs for the country level licenses or as
decided by Ministry of I&B from time to time) unless
refused for reasons to be recorded in writing.
• Licensing Authority shall inform renewal/ refusal to the
applicant atleast one month before the date of expiry of
the current license to facilitate him to make appropriate
arrangements and inform LCOs and broadcasters as the
case may be.
4.12 License suspension and Termination
4.12.1 Any sector will be able to sustain growth for longer duration only
when it is subjected to adequate supervisory control and
monitoring to ensure adherence to licensing terms & condition.
Strict provisions are desirable to deter the licensees from
violating the terms & conditions of the license like financial
penalties or termination of license or both as the case may be.
4.12.2 The LCOs during open house discussions brought out certain
issues in which violation of Interconnection regulations are
alleged. Without going into the details, it is obvious that effective
implementation of regulations issued by TRAI/ Licensing
authority is a ensured. It is argued that licensing framework
must prescribe adequate penalties, which deter tendencies to
violate licensing terms and conditions.
4.12.3 The license should clearly set out what sanctions the
licensor/regulator can apply for non-compliance. The range of
sanctions should include fines, suspension, shortening or
78
termination/revocation of a license. The amount of the fine
should take into account various factors such as: the
seriousness of the breach, the licensee’s record of breaches etc.
Fines should be proportionate to the offence. In general, it is
very important to foster a sound compliance system than to
punish violations. However, such provisions for penalty are
desirable.
4.12.4 In view of above discussions, the Authority recommends
• The license for a multi system operator shall include, as
part of the terms and conditions of license, provisions
for levy of a penalty, either by TRAI or by the licensing
authority, of upto rupees five lakh for district level
license and upto rupees twenty lakhs for State and
country level licenses for each violation of licensing
terms and conditions or of TRAI’s
regulations/orders/directions. The imposition of such
penalty by the TRAI shall be without prejudice to the
revocation/termination of the license by the licensing
authority and the initiation of appropriate proceedings
against the licensee under the relevant provisions of the
Telecom Regulatory Authority of India Act, 1997.
• TRAI shall examine the alleged violations on case to
case basis and impose penalties on MSOs based on the
seriousness of the offence and other conditions as
applicable.
• The licensor shall reserve the right to cancel/ terminate
the license issued to an MSO without prejudice to any
other action as deemed fit in case of violation of terms
and conditions of the license.
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4.13 Migration procedure 4.13.1 MSOs in non-CAS notified areas
4.13.1.1 Presently MSOs in the non CAS areas are registered as cable TV
operator only. A new licensing regime has been envisaged for
MSOs and all existing MSOs shall have to obtain license as per
new guidelines within one year from the date of such
notification or from the date of expiry of existing registration as
cable TV operator, whichever is earlier. For migrating to new
regime all such MSOs have to apply for license to the concerned
licensing authority.
4.13.2 MSOs in CAS notified areas
4.13.2.1 According to the amendments made on 31st July 2006 in the
Cable Television Network Rules, 1994, for providing services
with addressable systems in the CAS notified areas, existing
MSOs have to seek permission from Ministry of Information and
Broadcasting. For this purpose MSOs have to apply in a
prescribed form (Form 6) alongwith a processing fee of Rs.
10,000/-. Any Individual/firm/company/association of
persons/body of individuals is eligible for seeking permission to
provide service as MSO in CAS notified area and following
documents are required to be submitted alongwith the
application for permission:
(i) Copy of the Registration Certificate as a Cable TV
operator.
(ii) Copy of Certificate of Incorporation and Memorandum
and Article of Associations for Companies.
(iii) Board of Directors (List of Directors along with bio-data
of each Director giving date of birth, place of birth,
parentage, nationality, permanent address, residential
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address, official address, passport No. (if any),
qualification, experience, etc.
(iv) List of key executives including CEO/MD along with
details as above.
(v) Copy of the audited Balance Sheet and Profit and Loss
Account for the immediate preceding year and certificate
of Net Worth on the basis of these documents by a
Chartered Accountant.
(vi) Details of availability/ arrangement of funds (sufficient
proof to be enclosed)
4.13.2.2 Permission is granted by Ministry of I&B on the basis of
information given in respect of its existing operational area,
number of subscribers, its local cable TV operators in CAS
notified areas, financial strength, management capability,
security clearance, preparedness to supply and maintain
adequate number of set top boxes for its subscribers,
installation of its subscriber management system and
compliance with all other quality of service standards as may be
specified by the Authority.
4.13.2.3 It may be noted that as per present provisions, MSOs in both
CAS and non-CAS areas have to get registered as cable TV
operator for providing services. However, MSOs have to get
permission from Ministry of I&B for providing cable TV services
in CAS notified area by paying a processing fee. The permission
so granted to MSOs in CAS areas is coterminous to their
registration as cable TV operator.
4.13.3 The Authority has envisaged a new licensing regime for MSOs as
discussed in preceding sections and all the MSOs, both in CAS
and non-CAS areas will be required to migrate to the new regime.
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Since functions of MSO are similar in both the areas, therefore the
regulatory regime should also be identical for all MSOs. MSOs in
the CAS notified areas are subjected to provisions regarding
quality of service, standard interconnection agreements and
suspension of permission/license in the event of violation. In
order harmonize the provision relating to MSOs in CAS and non-
CAS area to bring harmony, the Authority will frame appropriate
regulations for the MSOs once the recommendations for new
regime are accepted.
4.13.4 It is envisaged that all the existing MSOs in the sector will be
brought under the new licensing regime. For this purpose a
reasonable timeframe should be given to all existing MSOs in
order to fulfill the terms and conditions of the new licensing
regime. Presently there are approximately 6000 MSOs in the
country and migration of all of them to new regime will require
adequate time.
4.13.5 In view of above, the Authority recommends
• All existing MSOs shall have to obtain license as per new
guidelines within one year from the date of such
notification or from the date of expiry of existing
registration as cable TV operator, whichever is earlier.
Till such time, the existing valid registration shall be
treated as “deemed license”.
• Telecom Regulatory Authority of India (TRAI) shall bring
appropriate regulations for MSOs operating in non-CAS
areas to bring harmony in functions of MSOs both in
CAS and non-CAS areas.
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4.14 Complaint redressal mechanism
4.14.1 MSOs provide aggregated signals to LCOs. MSOs are an
important link in the distribution chain in the cable TV industry.
Non-availability of signal/ poor quality of signal must be attended
to on priority basis as it impacts LCOs operations and ultimately
the subscribers.
4.14.2 During consultation process, it was brought to the notice of the
Authority that some MSOs do not have well defined complaint
redressal mechanism for LCOs. In the absence of such complaint
redressal mechanism, LCOs have to struggle to get their
problems redressed, which sometimes take unduly long time.
4.14.3 The lack of complaint redressal mechanism at MSO level
ultimately impacts the end consumer as he suffers and may
either not get TV signals at all or get poor quality of signals.
4.14.4 In order to avoid such situations, all MSOs should also be
required to have an effective complaint redressal mechanism to
address the complaints of LCOs.
4.14.5 In view of above, the Authority recommends
• All MSOs shall be required to maintain 24x7 complaint
handling and technical support system at the location of
their headends and at other convenient points,
depending upon the area of operation of the MSOs.
• Each MSO shall provide details of the telephone numbers
to all the connected LCOs for making complaints. Such
numbers must be printed on the bills and payment
receipts also.
• In case of a complaint from a LCO, MSO will-
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o Register the complaint by providing it a complaint
number;
o Record and provide date & time of booking of
complaint;
o Redress the complaint within reasonable time;
o Consider the complaint as redressed only after
confirmation from LCO;
o Record date and time of clearance of fault.
• The MSO shall maintain records of the registration and
redressal of complaints. Such records shall be made
available for inspection as and when desired by
authorized officer as specified in the Cable Television
Networks (Regulation) Act, 1995, licensing authority,
TRAI or any of their authorised representatives/agencies
as the case may be.
4.15 Quality of Service 4.15.1 The responsibility to provide the required quality of service lies
mainly with the LCOs in analog transmission. However, LCOs
will not be able to provide good quality of service, unless they get
good quality signals from MSOs.
4.15.2 This issue was brought to the notice of the Authority during
consultation process. It was argued that some times MSOs or
their franchisees degrade the signal quality to such an extent
that good quality TV program cannot be received, though
technically signal feed is not disconnected. It was suggested that
specific signal levels should be fixed at different point in the
network to ensure proper receipt of the TV signals.
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4.15.3 The Authority has examined the issue. It is noted that Bureau of
Indian Standards (BIS) has already prescribed transmission
standards under IS 13420 (revised). The Cable Television
Networks (Regulation) Act, 1995 presently requires the MSOs
and LCOs to comply with BIS standards relating to equipments
only and there is no stipulation regarding transmission
standards, which also need to be specified as has been
recommended for LCOs (para 3.8.14.3).
4.15.4 Accordingly the Authority recommends
• The terms & conditions of license should cast an
obligation upon the licensees to follow Bureau of Indian
Standards (BIS) standard IS 13420 (revised) or any other
standard regarding transmission in cable TV networks as
defined from time to time.
4.16 Other Licensing Obligations 4.16.1 The transparent functioning of MSOs is important for smooth
functioning of the entire cable TV industry. During consultation
process it was brought to the notice of the Authority that many
MSOs work as franchisee/ distributor/ agent of broadcasters
and therefore they use their strength for competing with other
MSOs/ LCOs. Here it is important to note that Hon’ble Supreme
court of India in appeal (Civil) no 5524 of 2005 in case of Star
India Pvt. Limited and sea T.V. Networks and Others observed as
under:-
“….. It is clear that Although a broadcaster is free to
appoint an agent under the proviso to clause 3.3 such
agent cannot be a competitor or part of the network,
particularly when under the contract between the
broadcaster and the designated agent-cum-distributor
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exclusivity is provided for the sense that the signals of the
broadcaster shall go through the cable network owned and
operated by such an agent-cum-distributor ……..”.
4.16.2 Stakeholders also pointed out that some MSOs are also having
their exclusive franchisees/ distributors/ agents who further
negotiate with LCOs. Since the Cable Television Networks
(Regulation) Act, 1995 does not recognize such agents in the
distribution chain, they use their power to pressurize LCOs and
disconnect signals without following prescribed procedures.
They requested TRAI to look into this issue as well.
4.16.3 It may not be out of place to mention that Interconnections are
regulated as per the provisions of relevant regulations as
specified by TRAI from time to time. MSOs must be obliged to
comply with all rules/ regulations/ directions as specified by
TRAI from time to time.
4.16.4 Adequate control on unlicensed LCOs is another important issue
of concern. MSOs can play important role in ensuring the
registration of the LCOs, as most of LCOs take TV signals from
MSOs (leaving aside the Independent LCOs). Therefore, while
giving contents to LCOs, MSOs can ensure that TV signals are
given only to those LCOs who are licensed and make sure that
license number of such LCOs is one of the items to be mentioned
in their agreement while providing content. This would help in
ensuring order in cable TV sector and force un-licensed LCOs to
come under the regulatory framework.
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4.16.5 In view of above the Authority recommends
• Within his licensed area of operation, an MSO shall not
function as an exclusive franchisee/ distributor/ agent
of any broadcaster.
• If an MSO appoints any franchisees/ distributors/ agents
in any area to negotiate and function as an
intermediatory on his behalf while dealing with the
LCOs, then in all such cases, such intermediatories
acting on behalf of MSOs shall be considered to be acting
on behalf of and with the authorization of the MSO and
the MSO shall be fully responsible for all their acts of
commissions and omissions.
• MSOs shall be obliged to comply with all rules/
regulations/orders/ directions as specified by TRAI from
time to time and also to comply with all Acts, Rules,
Regulations and Directions of the Government.
• MSOs will provide TV signal feed only to licensed LCOs
and other distribution platforms permitted and licensed
by the Government.
4.16.6 Interconnection and Billing
4.16.6.1 During the open house discussion it has been brought to the
notice of the Authority that sometimes the MSOs neither
provide periodic bills nor provide the receipt for the payment
made by LCOs. In absence of proper billing mechanism,
settlement of payments becomes a bone of contention between
LCOs and MSOs. This often becomes an issue of dispute. A
proper billing mechanism would be desirable in order to avoid
such disputes. Further, complaints have also been received
that some MSOs do not provide signed copies of the
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interconnection agreements to the LCOs, as a result of which
the LCOs are not able to enforce their rights in case of disputes.
4.16.6.2 Presently, interconnection between MSOs and LCOs are
regulated in accordance with Regulations issued by TRAI from
time to time. However, it is important to bring out certain
procedural clarity in execution of interconnection agreements
between MSOs and LCOs. An appropriate regulatory framework
based on the necessity will be prescribed by TRAI; still it is
desirable that certain general guidelines are included in the
licensing framework of MSOs to protect the interests of LCOs.
4.16.6.3 In view of above, the Authority recommends
• All agreements between MSOs and broadcasters and
between MSOs and cable operators shall be in writing.
• It shall be the responsibility of the MSOs to compulsorily
provide a signed copy of the interconnection agreement
to the LCOs and to retain an acknowledgement thereof
obtained from LCOs before the MSOs commence
supplying of signals to the LCOs. In addition, MSOs will
also attempt to provide a translated copy of the
interconnection agreement in the local language.
• MSOs shall provide a monthly bill to LCOs giving details
of current demand and past outstandings, if any,
separately.
• All such bills must be serially numbered and must bear
name, telephone number, Service Tax number,
Entertainment Tax number (if applicable) of MSO.
• MSOs shall issue receipts to LCOs for the payments
received clearly indicating date of receipt of payment.
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• MSOs shall be required to maintain a register ( in paper
form or electronic form) indicating the names of LCOs
connected to them, the monthly billing details, taxes
charged (if any), tax payment details, details of payment
received from LCOs in auditable and verifiable form.
• MSO shall make available such register on demand for
inspection/verification to the licensing authority, the
Ministry of I&B, the TRAI, the authorised officer and to
the concerned tax authorities or to any person or agency
duly authorised by them.
4.16.7 Data Collection regarding the MSOs
4.16.7.1 Data collection related to licensed MSOs is very important for
supervisory guidance and proper regulation of the Cable TV
sector. The present mechanism of data collection seems to be
inefficient as any authenticated details regarding number of
MSOs, their location, area of operation and the validity of their
registrations at different places etc. are not readily available.
These issues have been kept in mind while framing the draft
licensing conditions and regulatory framework for MSOs in
previous sections. It is proposed that data collection should be
done by licensing authority under the MIB to facilitate holistic
view of the sector.
4.16.7.2 The licensing authority shall submit the information regarding
number of licensed MSOs to MIB which will make suitable
arrangements to publish the names of the licensed MSOs on
MIB website along with their address, operational area and
validity period of the license. This may not be difficult as
number of MSOs is likely to be approximately 6000 or so. All
the MSOs will be bound by various regulations, directions and
89
orders issued under the Telecom Regulatory Authority of India
Act, 1997 by TRAI from time to time and would, in particular,
be required to abide by the provisions of relevant
Interconnection Regulations, tariff orders, and reporting
requirements as prescribed by TRAI from time to time. In
addition to this broadcasters will give broadcast TV signals only
to a licensed MSO for the area and the time period for which the
MSO is licensed. This will help availability of correct data
related to licensed MSOs to Government agencies and other
stake holders which may require such information from time to
time.
4.16.7.3 In view of above, the Authority recommends
• The licensing authority responsible to grant licenses to
MSOs shall provide the details of licensed MSOs, their
operational area and the period of validity etc to
Ministry of I&B and to the TRAI.
• Ministry of I&B shall place the information on their
website for information of all stake holders.
• All the MSOs shall be bound by various regulations,
directions and orders issued by the TRAI from time to
time under the Telecom Regulatory Authority of India
Act, 1997.
• Ministry of I&B may issue suitable guidelines to all
Broadcasters to give broadcast TV signals only to
licensed MSO for the area and the time period for which
the MSO is licensed.
90
4.16.8 Content generated and distributed by MSOs
4.16.8.1 Majority of the content delivered by MSOs are TV channels
obtained from broadcasters. TV channels broadcasting are
already bound by the up-linking/ down-linking guidelines.
However MSOs sometimes distribute local news & video
channels to cable TV operators. These channels are not
obtained from broadcasters; therefore such channels are not
subjected to up-linking/ down-linking guidelines issued from
time to time. However, these channels are required to be in
conformity with the program code, the advertisement code and
other such guidelines. MSOs are to be held fully responsible for
the strict compliance with all the regulations/program
code/advertisement code/guidelines as prescribed by Ministry
of I & B from time to time in respect of the content of such local
channels.
4.16.8.2 For all contents and channels obtained from broadcasters;
responsibility must completely rest with the broadcasters.
However for violation of any regulations/program
code/advertisement code/guidelines in respect of content
generated or transmitted by MSOs, they (MSOs) should be held
fully responsible.
4.16.8.3 In view of above, the Authority recommends
• MSOs shall, in respect of all content generated or
transmitted by them, be responsible for compliance of
the program code, the advertisement code or any other
requirements as prescribed by the Government of India,
Ministry of I&B or any other competent authority from
time to time.
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• MSOs will not be responsible for transmission or
retransmission of content provided by the broadcasters,
for which the broadcaster alone would be held
responsible in accordance with the
Uplinking/Downlinking guidelines. However, MSOs will
effectively block any programme or channel whenever
they are ordered to do so by the authorized officer under
section 19 of the Cable Television Networks (Regulation)
Act, 1995.
4.16.9 Encouragement for digitalisation
4.16.9.1 Most of the MSOs and cable TV operators are providing cable
TV service using analog medium at present in non CAS area.
The emphasis is now shifting to digital transmission from
existing analog transmission. With the advancement of
technology MSOs may like to provide content related to value
added service like Video on Demand, Interactive TV, Time
shifted TV & Interactive gaming etc. For this purpose, MSOs are
required to upgrade their existing network. It is advocated that
such upgradations will require detailed network planning and
significant investment. Unless suitable business model is
conceived, the existing cable TV operators may find it difficult to
proceed with digitalisation.
4.16.9.2 It was also argued that digitalisation in India must be
encouraged. Some stakeholders felt that digitalisation must be
driven through regulatory mandate.
4.16.9.3 The digitalisation process is mainly driven by MSOs. The new
MSOs may be mandated to digitize their signals in three years
from date of issue of license as part of their performance
92
obligation. If any new MSO starts his operations as total digital
networks and provides only digital signals from the start of his
operations, such MSOs shall be given 50% reduction on the
applicable entry fee for the first term. Considering the legacy of
analog networks, the existing MSOs may be permitted to digitize
their network in five years from the date of notification of new
licensing regime. Existing MSOs shall also be eligible for
reduction of 50% in entry fee if they transform their operation
into digital network completely on the date of notification of new
licensing regime.
4.16.9.4 In view of above, the Authority recommends
• The new MSOs may be mandated to digitize their cable
TV network within three years from the date of issue of
license as part of their performance obligations, or
within five years from the date of notification of the new
licensing regime, whichever is earlier.
• The new MSOs who are starting their operations with
digital networks and who provide only digital signals
from the beginning of their operations shall be refunded
50% of their applicable entry fee for the first term after
their successful operation for six months, subject to
certification by Broadcast Engineering Consultants India
Limited (BECIL), where the licensee will meet the cost
of such certification.
• Existing MSOs may be mandated to digitize their cable
TV network within five years from the date of
notification of new licensing regime.
• Existing MSOs shall also be eligible for reduction of 50%
in entry fee if they transform their operation into digital
93
network completely on the date of notification of new
licensing regime.
• No license should be issued to any MSO who operates
with analog headends and gives analog signals after
expiry of a period of five years from the date of the
notification of the new licensing regime. No renewals
should be granted for MSOs operating with analog
systems after this date.
4.16.10 Right of Way to MSOs
4.16.10.1 MSO is an important entity in the cable TV channels’
distribution chain, which aggregates the signals obtained from
different broadcasters and provide these aggregated signals to
LCOs. For LCOs, quality of service parameters have been
stipulated (refer para 3.9.14.3) for signals delivered to
subscribers. Since MSOs provide signals to LCOs, they will be
required to deliver signals with good quality to LCOs.
4.16.10.2 Some of the stakeholders also suggested that MSOs should be
made eligible to seek RoW in order to facilitate them to create
infrastructure to deliver good quality signals to LCOs.
4.16.10.3 In view of above, the Authority recommends
• MSOs shall be made eligible for seeking RoW on non
exclusive basis for laying Optic fiber.
• Concerned State Governments/ local bodies may
consider formulating a RoW policy for MSOs.
• Ministry of I&B may initiate a dialogue with the State
Governments to facilitate the formulation of uniform
RoW policy for MSOs.
94
4.16.11 Software standardization
4.16.11.1 While adopting digitalisation, MSOs will use different type of
software for encryption of the digital signals and subscriber
management. At present, there are no set standards
recognized by Ministry of I&B for these software.
4.16.11.2 During consultation process, some stakeholders mentioned
that different broadcasters insist for particular encryption
software and want that their channel signal be protected using
only specific software. This warrants that some industry body
may look into it and standardize the software considering all
aspects so that one can choose appropriate software from
authorized software list. Since the issue of encryption and
subscriber management software mainly affects the
broadcasters, it would be advisable that an industry body
such as Indian Broadcasting Federation (IBF) comes out with
an appropriate list of such software generally acceptable to the
broadcasters, in consultation with Broadcast Engineering
Consultant (India) Limited (BECIL), which is a PSU under the
Ministry of I&B.
4.16.11.3 With a view to encouraging digitalisation and voluntary CAS,
the Authority recommends
• Indian Broadcasting Federation (IBF) may be requested
to maintain an indicative list of accepted Encryption
and Subscriber Management softwares which can be
deployed by MSOs. This would be done in consultation
with Broadcast Engineering Consultant (India) Limited
(BECIL), which is a PSU under the Ministry of I&B.
95
4.16.12 Foreign Direct Investment (FDI)
4.16.12.1 Presently, the cable infrastructure in the country is
predominantly one way analog network. This has resulted in
limitation on channel carrying capacity of the network and
limited to use for carriage of TV channels only. There is
increasing convergence of technologies in telecom and
broadcasting sectors. Technically, it is possible for cable TV
networks to provide voice telephony and broadband (including
Internet). Upgradation of cable TV networks would help in
spreading broadband penetration and other telecom services
in the country. To harness the advantages of advancement in
technology, it is very important to upgrade the existing cable
infrastructure in the country and augment its capacity by
digitalisation and increasing use of optical fiber links. This
would require large amount of investment as well as
technological inputs.
4.16.12.2 Although numerically the number of households receiving
cable television services in the country is very large (about 78
million households), technologically, the country is trailing
behind other advanced countries, where the cable networks
are digital two-way networks which support triple play
services.
4.16.12.3 An estimate of the investment required for digitalisation of
cable television networks in the country was given by the
Authority in its recommendations on Headend-In-The-Sky
(HITS) sent to the Government on October 17, 2007. Extracts
of the relevant para of the recommendations are as under:-
“2.25 …If such a vast cable network, serviced by 6000 MSOs
and nearly 60,000 last mile cable operators, is to be
96
digitalised in a conventional manner by setting up digital headends for each MSO in each city/town, then it will require an investment of more than Rs 15,000 crores, apart from a very long time required for the same…”
4.16.12.4 This estimate of Rs. 15,000 Crores is for the cost of conversion
of existing one way analogue cable network to one way digital
cable network. If the cable networks are to be upgraded to
two-way 750-850 MHz broadband digital cable networks, then
the cost of upgradation would work out to be still higher. This
cost has been estimated in the range of US$ 200 per home in
a publication by Media Partners Asia, Ltd., STAR Group,
Macquarie Media Group and Liberty Global, Inc. This cost
covers an upgrade to a two-way 750-850 MHz broadband
digital cable network; cable modem deployment, and merger
and acquisition related costs relating to last mile
consolidation. This would translate into a sum of Rs. 64,000
Crore for 80 million cable homes in the country (at a
conversion rate of Rs. 40 per US$). Thus, it is clear that
enormous amount of investment is required for upgrading the
cable networks in the country.
4.16.12.5 The Authority in its recommendation on “Foreign
Investment Limits for Broadcasting Sector” dated 26th
April 2008 has already recommended enhancement of FDI
limit from present level of 49% to 74% to meet the
requirement for the upgradation of the cable network
cost. This will be necessary to boost the cable TV sector
for bringing in addressability and technological
advancement. In the present regulatory regime MSOs are
registered as LCOs, therefore no separate provisions for
the FDI limit for MSOs have been stipulated in the above
97
mentioned recommendations. It is envisaged that once
the new regime is in place, enhanced FDI limits will also
be implemented for MSOs on priority basis. Also it will be
unfair to cable TV sector if other transmission modes are
being permitted 74% FDI.
4.16.13 Amendments in the Cable Television Networks (Regulation)
Act, 1995 and the Rules framed thereunder
4.16.13.1 Presently MSOs are regulated as per the provisions of the
Cable Television Networks (Regulation) Act, 1995 (7 of 1995)
and the Cable Television Networks Rules, 1994. Para number
4.3.4, 4.4.4, 4.5.4, 4.6.3, 4.7.2, 4.8.2, 4.9.4, 4.10.3, 4.11.3,
4.12.4, 4.14.5, 4.16.5, 4.16.8.3 and 4.16.12.5 of the
recommendations made in this chapter would require
amendment in the Cable Television Networks (Regulation) Act,
1995 and the Rules framed thereunder. The para numbers
mentioned above are indicative and not exhaustive.
Consequential amendment may also be made appropriately in
the Cable Television Networks (Regulation) Act, 1995 (7 of
1995) and the Rules framed thereunder in view of the above
recommendations.
98
Chapter 5
Summary of Recommendations
55..11 CChhaannggee iinn pprreesseenntt LLeeggaall pprroovviissiioonnss aanndd RReegguullaattoorryy
FFrraammeewwoorrkk ((ppaarraa 33..88))
• The present system of registration for Cable TV operators
should be replaced by a licensing framework.
• A separate licensing provision for Multi System Operators
(MSOs) should be introduced thus recognizing them as an
entity separate from Cable TV operators. (Please refer to
Chapter 4)
55..22 LLiicceennssiinngg ffrraammeewwoorrkk ffoorr LLooccaall CCaabbllee TTVV ooppeerraattoorrss ((LLCCOOss))
55..22..11 DDeeffiinniittiioonn ooff ppeerrssoonn aanndd eelliiggiibbiilliittyy ((ppaarraa 33..99..22))
• An individual who is a citizen of India;
• An association of individuals or body of individuals, whether
incorporated or not, whose members are citizens of India;
• A company as defined in section 3 of the Companies Act,
1956 (1 of 1956) with such eligibility conditions as may be
specified by the Central Government or the Authority;
55..22..22 SSeerrvviiccee AArreeaa ((ppaarraa 33..99..33))
• The service area for Cable TV service license should be the
Revenue District or the geographical boundaries of the State,
as the case may be, in accordance to the license.
• The cable operator can operate in any/ all locality/ localities
of the service area of license (District or the State as the case
may be) on non-exclusive basis. There will be no restriction
on cable operators to provide service in any part of the
service area of license (District or the State as the case may
be) on the ground of existence of incumbent Cable TV
99
operator(s) in such part of the service area. Thus it is
envisaged that once a Local Cable Operator (LCO) obtains
the license, he will have complete freedom to operate in any
part of the service area of license.
55..22..33 LLiicceennssiinngg AAuutthhoorriittyy ((ppaarraa 33..99..44))
• No person shall operate a cable television network unless he
is licensed as a cable TV operator.
• The Senior Superintendent of Post Offices (Division Head) in
whose area the revenue district falls shall grant District Level
licenses to Cable TV operators on receipt of application form,
entry fee, other supporting documents as defined and after
fulfilling other formalities.
• Further, for State level license for cable operation, the Chief
Post Master General of the Circle or any other officer
nominated by the Chief Post Master General for the purpose
shall grant licenses to Cable TV operators on receipt of
application form, entry fee, other supporting documents as
defined and after fulfilling other formalities.
• Department of Posts may be required to devise an
appropriate code numbering plan for the whole country so
that each licensor will allot a unique license number to every
licensee. Such License number should consist of separately
identifiable digits for particular state code, area code, LCO
unique identity and validity. This will facilitate Computer-
based scrutiny of Cable TV operators, their renewal etc.
55..22..44 LLiisstt ooff ddooccuummeennttss ttoo bbee ssuubbmmiitttteedd aalloonngg wwiitthh aapppplliiccaattiioonn
((ppaarraa 33..99..55))
• Following documents shall be submitted along with the
application for grant of license for Cable TV services:
100
a) In case of individual
(i) ID proof (ii) Proof of residence (iii) PAN number (iv) Copy of current Income Tax Return (v) Service Tax registration number (If the number is not
available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of license)
(vi) Affidavit stating that he has not been convicted for any criminal offence
[Note: Individuals convicted for any criminal offence
shall not be eligible for the license]
b) In case of association or body of individuals (i) Document by which the association or body of
individuals has come into existence, including address and other details
(ii) PAN number (iii) Copies of current returns for Income Tax and Service
Tax. In case of newly constituted association or body of individuals which have not filed any such returns, the Service Tax registration number should be furnished (If the number is not available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of license).
c) In case of companies (i) A copy of the certificate of incorporation of the company
alongwith copies of Memorandum of Association and Articles of Association
(ii) PAN number (iii) Copies of current Tax returns for Income Tax and
Service Tax. In case of new companies which have not filed any such returns, the Service Tax registration number (If these numbers are not available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of licence).
101
[Note: Any change in the Memorandum of Association and/or Articles of Association shall be intimated to the licensing authority within seven days of such change.]
• It is further recommended that an applicant whose license
has been cancelled/ terminated earlier shall not be eligible
for a fresh license.
55..22..55 DDuurraattiioonn ooff LLiicceennssee ((ppaarraa 33..99..66))
• The duration of license for Cable TV services should be five
years.
55..22..66 EEnnttrryy FFeeee aanndd tthhee AAddmmiinniissttrraattiivvee CCeessss ((ppaarraa 33..99..77))
• An entry fee of Rupees Ten Thousand (Rs. 10,000/-) (non
refundable) may be fixed for obtaining District level Cable TV
service license.
• An entry fee of Rupees One Lakh (Rs. 100,000/-) (non
refundable) may be fixed for obtaining State level Cable TV
service license.
• A scheme for administrative cess, amounting to ten percent
of license fee, should be evolved to meet the contingency
needs of the Department of Posts for maintenance of records
etc., of Cable TV operators. Such a cess should be imposed
on the licenses. This should be retained at the licensing
authority level and should not be credited to the
Consolidated Fund of India. The licensing authority may
levy, in addition to the entry fee of Rupees Ten Thousand or
Rupees One lakhs, as the case may be, the administrative
cess at the rate of 10 per cent of the entry fee. The guidelines
for collection, maintenance of records, utilization and audit
of such an administrative cess may be evolved by the
Ministry of Information & Broadcasting in consultation with
Department of Posts.
102
• There will be no annual license fee.
• The entry fee for LCOs in NE and J&K region may be
reduced to 50 % for applications received during initial
period of three years from the date of notifications of new
regime. The decision may be reviewed after three years by
ministry of Information and broadcasting.
55..22..77 TTiimmeeffrraammee ffoorr pprroocceessssiinngg ooff lliicceennssee aapppplliiccaattiioonn ((ppaarraa
33..99..88))
• Licensing authority shall grant license for operation of Cable
TV Network within 45 days from the date of the receipt of the
application accompanied with all the required documents
and payment of applicable entry fee.
• In case of refusal to grant license for operation of Cable TV
Network, the reasons for the same shall be communicated to
the applicant within 45 days.
• The appellate authority for District Level licenses shall be the
Chief Post Master General of the circle having jurisdiction
over the Senior Superintendent of Post Offices (Division
Head) or an officer nominated by him.
• For the State level licenses, the CPMG/Pr. CPMG shall be
the appellate Authority, as the case may be.
• Applicant shall have option to appeal to Appellate Authority
within 30 days of receipt of such refusal or within 90 Days
from the date of receipt of submission of application seeking
license to operate Cable TV Network by the licensing
authority, as the case may be.
• The provisions regarding appellate authority as proposed
above should be in addition to, and not in derogation of, any
other law for the time being in force.
103
55..22..88 RReenneewwaall pprroocceessss ((ppaarraa 33..99..99))
• Application for renewal of Cable TV license shall be made to
the Licensing Authority (The Senior Superintendent of Post
Offices (Division Head) for District Level licenses and the
Chief Post Master General of the circle for State level license)
by the concerned Cable TV operator 3 months in advance of
the date of expiry of license.
• License shall also provide details of total number of their
subscribers, area of operation, type of signal feed
(Analog/Digital) along with the request for renewal.
• An LCO seeking renewal will also submit details regarding
area of operation and number of subscribers to the licensing
authority.
• LCO shall submit the following documents alongwith
application for renewal of license:
o Copy of current Income Tax, Entertainment tax and Service Tax returns filed;
o Details of the authorised officer of the area to whom the licensee is reporting;
• Self certification that the licensee has neither been penalized
nor debarred by authorized officer from providing service for
any breach of licensing terms and conditions or any other
unlawful activity.
• The Licensing Authority shall seek comments from the
concerned authorised officer specified in the Cable Television
Network (Regulation) Act, 1995, to ascertain about any
breach of the licensing conditions.
• If no reply is received from the authorised officer within four
weeks, it will be assumed that there is nothing adverse
against the said Cable TV operator and licensing authority
104
shall renew the license for a further period of 5 years on
payment of prescribed fee.
• The fee for renewal of District level Cable TV license should
be Rupees Ten Thousand (Rs. 10,000/-).
• The fee for renewal of State level Cable TV license should be
Rupees One Lakh (Rs. 100,000/-).
• Department of Post may levy, in addition to the applicable
renewal fee, an amount calculated at the rate of ten per cent
of the total renewal fee as administrative cess.
• In case the licensing authority is informed of serious breach
of licensing conditions by the authorised officer, then the
request for renewal of the license shall be withheld and a
show cause notice shall be issued to him. The licensing
authority shall take decision within six weeks in accordance
with the guidelines issued by Ministry of I&B / TRAI from
time to time. If the renewal is denied then the reasons for
such rejection shall be communicated to the concerned
Cable TV operator. Such Cable TV operator can appeal to the
appellate authority within 30 days of such rejection.
• Ministry of I&B /TRAI shall frame guidelines indicating the
nature of breaches which will be treated as serious,
warranting refusal of renewals or cancellation of license and
such guidelines may be made binding on the licensee.
55..22..99 SSuussppeennssiioonn aanndd TTeerrmmiinnaattiioonn ooff LLiicceennssee ((ppaarraa 33..99..1100))
• The license should have a provision for termination/
cancellation of license if there is any breach of terms and
conditions of the license, or of the provisions of the Cable
Television Networks (Regulation) Act, 1995 or the Rules
made thereunder or TRAI’s regulations/directions/orders.
Such termination/ cancellation of the license shall be
105
without prejudice to initiation of appropriate proceedings
against the licensee under the relevant provisions of the
Cable Television Networks (Regulation) Act, 1995 or the
Telecom Regulatory Authority of India Act, 1997, as the case
may be.
• Any breach of licensing terms and conditions (given in
Annex V) may be reported by the authorised officer,
entertainment tax and service tax authorities to the
concerned licensing authority (Senior Superintendent of Post
Offices (Division Head) for District Level licenses and the
Chief Post Master General of the State for State level license).
• The licensing authority shall issue a notice to the licensee
and seek his explanation on the reported breach of licensing
terms and conditions giving him reasonable time, not
exceeding 15 days, and requiring him to show cause as to
why the license should not be terminated/cancelled or why
any penalty as contemplated in the terms and conditions of
the license should not be imposed on the licensee.
• Upon receipt of the explanation of the licensee within the
time so allowed or if the licensee fails to respond to such
notice, after the expiry of the time so allowed, the licensing
authority shall take a final view in the matter in accordance
with the guidelines issued, by Ministry of I&B / TRAI from
time to time, after taking into account all the facts and
circumstances of the case including the explanation, if any,
offered by the licensee and convey its decision to the
concerned cable operator in writing.
• In case of termination/cancellation of a license, but there is
no suspension of the license already in force, the licensee
106
shall be given one month’s time to close down his operations
and to suitably notify his customers.
• In case of termination/cancellation/suspension of license,
the licensing authority shall intimate the same to the
authorized officer of the area for enforcing these orders.
• The license for a local cable operator shall include, as part of
the terms and conditions of license, provisions for levy of a
penalty by TRAI or by licensing authority, of upto Rupees
one lakh for each violation of licensing terms and conditions
(as given in Annex V), where the violations noticed do not fall
under the classes of violations warranting
termination/cancellation of the license, as indicated in the
guidelines issued by the Ministry of I&B or for violation of
TRAI’s regulations/ directions/orders. The imposition of
such penalty by the TRAI shall be without prejudice to
initiation of appropriate proceedings against the licensee
under the relevant provisions of the Telecom Regulatory
Authority of India Act, 1997.
55..22..1100 MMiiggrraattiioonn ooff eexxiissttiinngg CCaabbllee TTVV ooppeerraattoorrss ((ppaarraa 33..99..1111))
• All existing valid Cable TV operators holding valid
registration would be permitted to migrate to new license
regime within a period of 12 months from 31st March of the
year in which the revised procedure is notified or from the
date of expiry of existing registration, whichever is earlier.
• All existing Cable TV operators who have valid registration as
on 31st March of the year in which the revised procedure is
notified will be granted license on receipt of application for
license, requisite entry fee and subject to fulfillment of other
terms & conditions prescribed in the license.
107
• Cable operators who do not possess a valid registration as on
31st March in that year will be treated as new applicants.
55..22..1111 SSuubbssccrriibbeerr ccoommppllaaiinntt rreeddrreessssaall mmeecchhaanniissmm ((ppaarraa 33..99..1122))
• Each LCO will provide the telephone number to all the
subscribers for making complaint. Such numbers must be
printed on the payment receipt.
• In case of a complaint from a subscriber, LCO will
o Provide the complaint number o Keep record of date & time of booking of such
complaints in a register. o Treat the complaint as disposed of only after
confirmation from subscriber. o Keep record of date and time of rectification of such
complaints in the register or in the electronic form.
• Such records shall be maintained neatly and shall be
presented if asked by Authorized officer or any other
competent agency so prescribed.
55..22..1122 SSuubbssccrriibbeerrss’’ bbiilllliinngg ((ppaarraa 33..99..1133))
• LCO shall maintain the details of its subscribers.
• LCO shall provide receipts for payments received from
subscribers as specified by TRAI from time to time. Such
receipts must be serially numbered and bear name,
telephone number, Service Tax number and Entertainment
Tax number (if applicable) of LCO.
• Such receipt should provide details of subscription charges
& taxes separately.
55..22..1133 QQuuaalliittyy ooff SSeerrvviiccee ((ppaarraa 33..99..1144))
• The licensee shall abide by section 9 of Cable Television
Network (Regulation) Act 1995, relating to use of standard
equipment in Cable TV Networks.
108
• Licensed cable operators should comply with BIS Standard
IS – 13420, Part I (Revised) relating to system performance,
and ensure delivery of proper signal at subscriber premises
as given under:
o C/N > 44 dB o Minimum Carrier level 60 dB(µV) o Maximum Carrier level 80 dB(µV) o Slope < 12 dB o X-Mod > 57 dB o CSO > 57 dB
C/N – Carrier to Noise ratio
CSO - Composite Second Order Interference
X-Mod – cross modulation
Slope is caused by ‘SKIN EFFECT’, wherein signal attenuation increases with frequency of the channel
(Parameters mentioned above are indicative only and subjected to any change by BIS from time to time without any notice)
55..22..1144 DDaattaa ccoolllleeccttiioonn ooff LLCCOOss ((ppaarraa 33..99..1155..22))
• The Licensing Authority will maintain the records of the
licensed LCOs as per the format given at annexure IV.
• The Licensing Authority will make adequate arrangements to
furnish such information to Ministry of I&B and TRAI in
such form and at such intervals as desired by them.
• The Department of Post will be provided administrative
charges by way of levy of administrative cess (at the rate of
ten per cent of entry fee and renewal fee as discussed earlier)
to meet the administrative expenses in order to carry out the
licensing data reporting and monitoring work.
109
55..22..1155 RRiigghhtt ooff WWaayy ((RRooWW)) ((ppaarraa 33..99..1155..33))
• Cable TV operators should be made eligible for seeking RoW
for laying Cable/Optic fiber both underground as well as
over poles on non exclusive basis.
• Concerned State Governments/ local bodies may consider
formulating a RoW policy for Cable TV operators.
• Ministry of I&B may initiate a dialogue with the state
governments to facilitate the formulation of uniform RoW
policy for Cable TV operators.
55..22..1166 AAddddrreessssaabbiilliittyy rreellaatteedd iissssuueess ((ppaarraa 33..1199..1155..44))
• Every Cable TV operator should be required to maintain a
register giving details of its subscribers, details of bills,
details of tax collected and paid with date, in verifiable &
auditable form. LCOs will produce this register for
examination by concerned enforcement agencies (such as the
authorized offers, authorized functionaries of the
Departments of the Government concerned with
entertainment tax, service tax, etc.) as & when required.
• The MSOs shall incorporate provision in RIO to review the
subscriber base of such LCOs on half yearly basis where
such auditable subscriber base has been maintained.
• Every Cable TV operator will submit an annual statement to
the authorized officer giving details of its subscribers,
specific area of operations etc.
55..22..1177 CCoonntteenntt rreellaatteedd rreessppoonnssiibbiilliittyy iinn tthhee ccaassee ooff ssiiggnnaallss
rreecceeiivveedd ffrroomm MMSSOOss ((ppaarraa 33..1199..1155..55))
• LCOs shall not be responsible for the content provided by
MSOs/ Broadcasters, but they will effectively block such
content whenever they are required to do so by the
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authorized officer under section 19 of the Cable Television
Networks (Regulation) Act, 1995 subjected to technical
feasibility. In case it is not technically feasible to block the
content by LCO, the LCO shall immediately inform the same
to the authorised officer. The authorised officer will decide
the future course of action in consultation with LCO and
MSO concerned.
• LCOs shall be permitted to transmit their ground based
channels, which will be subjected to Program code and
Advertisement code as prescribed in the Cable Television
Network (Regulation) Act, 1995 and any other instructions
issued by Ministry of I&B from time to time. Ministry of I&B
is requested to issue detailed guidelines for provision of
ground based channels by LCOs.
• District Magistrate will have full powers to immediately stop
the privilege to transmit local ground based channels by any
LCO at any point of time in public interest. Transmission of
such ground based channels will have to be discontinued
immediately.
• In order to ensure mandatory carriage of notified DD
Channels in the prime bands, officers of the rank of
Assistant Engineer and above from Prasar Bharti may inform
authorised officer wherever provisions of section 8 of the
Cable Television Network (Regulation) Act, 1995 are being
violated. It will be incumbent on part of authorised officer to
take immediate necessary action.
55..22..1188 EEnnccoouurraaggeemmeenntt ffoorr ddiiggiittaalliissaattiioonn ((ppaarraa 33..99..1155..66))
• Each broadcaster shall provide signals on digital platform to
LCOs and MSOs, who are voluntarily digitalizing their
networks.
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• The new LCOs may be mandated to digitize their networks in
three years from date of issue of license as part of their
performance obligations.
• Existing LCOs may be mandated to digitize their network in
five years from the date of notification of new licensing
regime.
• Digitalisation shall imply stopping of analog transmission
altogether including Free to Air Channels.
• No license for new LCOs will be given for analog
transmission from a date, which will be five years from the
date of such notification.
• LCOs providing the broadband services after obtaining
appropriate license in rural and far flung areas using two
way digitalised cable networks shall be entitled for USOF
subsidy/ support given to telecom operators for providing
similar services if they fulfill terms and conditions laid by
USOF. No discrimination shall be done based on the type of
network and technology used to provide a broadband
service.
55..22..1199 FFoorreeiiggnn DDiirreecctt IInnvveessttmmeenntt ((FFDDII)) ((ppaarraa 33..99..1155..77))
• The Authority in its recommendation on “Foreign Investment
Limits for Broadcasting Sector” dated 26th April 2008 has
already recommended enhancement of FDI limit from
present level of 49% to 74% to meet the requirement for the
upgradation of the cable network cost. This will be necessary
to boost the cable TV sector for bringing in addressability
and technological advancement. It is envisaged that
enhancement in FDI limits will be implemented in case of
LCOs on priority basis. Also it will be unfair to cable TV
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sector if other transmission modes are being permitted 74%
FDI.
55..33 LLiicceennssiinngg ffrraammeewwoorrkk ffoorr MMuullttii SSyysstteemm OOppeerraattoorrss ((MMSSOOss))::
55..33..11 DDeeffiinniittiioonn ooff MMuullttii SSyysstteemm OOppeerraattoorr ((MMSSOO)) ((ppaarraa 44..33))
Adoption of following definition of Multi System Operator (MSO)
and Multi-System Cable Television Network in the Cable
Television Networks (Regulation) Act, 1995:
• “Multi System Operator (MSO)” means any person who
manages and operates a multi-system cable television
network to provide cable television service to one /multiple
local cable TV operator(s) or to any other distribution
platform permitted and licensed by the Government”.
• “Multi-System Cable Television Network” means a system for
multi-channel downlinking and distribution of television
programmes by a land based transmission system using
wired cable or wireless or a combination of both”.
55..33..22 SSeerrvviiccee AArreeaa ((ppaarraa 44..44))
• The license area of an MSO may be the area of a revenue
district, geographical boundaries of a State or the entire
country as a whole, as the case may be.
• There will be no restriction on the number of MSOs in any
particular area. MSOs will be permitted to operate anywhere
within the service area of their license as per their business
plan, without any roll out obligations.
55..33..33 DDeeffiinniittiioonn ooff ppeerrssoonn aanndd eelliiggiibbiilliittyy ((ppaarraa 44..55))
• For the license of MSO, the eligible “person” will be
� An individual who is a citizen of India;
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� An association of individuals or body of individuals,
whether incorporated or not, whose members are
citizens of India;
� A company as defined in section 3 of the Companies
Act, 1956 (1 of 1956) with such eligibility conditions as
may be specified by the Central Government;
• License for Multi System Operator (MSO) will be granted only
to an Indian company as defined in section 3 of the
Companies Act, 1956 (1 of 1956) with such eligibility
conditions as may be specified by the Central Government)
as far as state level or country wide licenses are concerned.
However, licenses for district level operations can be granted
to a “person” as per the proposed definition.
55..33..44 LLiicceennssiinngg AAuutthhoorriittyy ((ppaarraa 44..66))
• Licenses to MSOs shall be granted by Ministry of Information
& Broadcasting (MIB) either directly or through any other
administrative unit under its direct control. One such
arrangement could be through Press Information Bureau
(PIB).
• Ministry of I&B may clearly define the licensing authority for
MSOs desirous to operate at the district, state and country
level.
• Ministry of I&B will allot a unique code/ registration number
to every such licensee. The structure of unique code should
consist of separately identifiable digits for particular state
code, area code, MSO’s unique code and validity. This will
facilitate computer based scrutiny of MSOs and renewals of
their licenses.
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• Any MSO, who desires to work as LCO, shall have to apply to
the concerned licensing authority for grant of such license
separately.
55..33..55 LLiisstt ooff ddooccuummeennttss ttoo bbee ssuubbmmiitttteedd aalloonngg wwiitthh aapppplliiccaattiioonn ((ppaarraa
44..77))
• A “person” desirous to get MSO license shall submit
following documents along with the required entry fee to
appropriate licensing authority:
(a) In case of individual –
(i) ID proof (ii) Proof of residence (iii) PAN number (iv) Copy of current Income Tax Return (v) Service Tax registration number (If the number is not
available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of license)
(vi) Affidavit stating that he has not been convicted for any criminal offence
[Note: Individuals convicted for any criminal offence shall not
be eligible for the license]
(b) In case of association or body of individuals –
(i) Document by which the association or body of individuals has come into existence, including address and other details
(ii) PAN number (iii) Copies of current Tax returns for Income Tax and
Service Tax. In case of newly constituted association or body of individuals which have not filed any such returns, the Service Tax registration number shall be furnished (If the number is not available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of license).
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(c) In the case of companies, -
(i) A copy of the certificate of incorporation of the company along with copies of the Memorandum of Association and Articles of Association.
(ii) PAN number (iii) Copies of current returns for Income Tax and Service
Tax. In case of new companies which have not filed any such returns, the Service Tax registration number (If these numbers are not available at the time of application, the same can be allowed to be submitted within two months. Applicant shall be required to file an affidavit to this effect along with the application for grant of license). [Note: Any change in the Memorandum of Association and/or Articles of Association shall be intimated to the licensing authority within seven days of such change.]
(iv) Entertainment Tax registration number (v) Details of CEO & other directors (vi) Details of proposed network architecture (vii) Proof of networth in the form of certificate from the
statutory auditor.
55..33..66 DDuurraattiioonn ooff LLiicceennssee ((ppaarraa 44..88))
• The duration of MSO license shall be 5 years for all the three
types of licenses (i.e. District level, State level and country
level).
55..33..77 EEnnttrryy FFeeee ((ppaarraa 44..99))
• The entry fee for district level MSO license shall be Rs.
100,000 and networth will be Rs. 5 lakhs.
• The entry fee for state level MSO license shall be Rs. 10
lakhs and networth will also be Rs. 10 lakhs.
• The entry fee for country Level MSO license shall be Rs 25
lakhs and networth will also be Rs. 25 lakhs.
• There will be no annual license fee.
• The entry fee for MSOs providing services in NE and J&K
region may be reduced to 50% for applications received
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during initial period of three years from the date of
notifications of new regime. This may be reviewed after three
years by Ministry of Information and Broadcasting.
55..33..88 TTiimmeeffrraammee ffoorr ggrraanntt //rreeffuussaall ooff lliicceennssee ((ppaarraa 44..1100))
• Licensing authority shall convey grant/refusal of license to
an applicant within 3 months from the date of the receipt of
the application complete in all respects. In case of refusal,
the reasons shall be communicated to the applicant within
this stipulated time frame.
• Ministry of I&B will also designate specific appellate
authorities for entertaining appeals against refusal by the
licensing authorities. The procedure for filing appeal shall be
in addition to, and not in derogation of any other law for the
time being in force.
55..33..99 RReenneewwaall pprroocceessss ((ppaarraa 44..1111))
• MSO shall apply for renewal of License to licensing authority
atleast three months before the date of expiry of license.
• Every MSO shall submit following documents alongwith
application for renewal of license:
o Copy of current Income Tax, Entertainment tax and
Service Tax returns filed;
o Details of the authorised officer to whom the licensee
is reporting;
o Self certification that the licensee has neither been
penalized nor debarred by authorized officer from
providing service for any breach of licensing terms and
conditions or any other unlawful activity.
• Ministry of I&B or its designated agency shall follow a
suitable verification procedure as regards breach of terms
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and conditions of license, if any, on the part of the concerned
licensee.
• Licensing Authority shall renew the license for further period
of 5 years on receipt of applicable fee (Rs 100,000/- for
district level, Rs 10 lakhs for state level and Rs. 25 lakhs for
the country level licenses or as decided by Ministry of I&B
from time to time) unless refused for reasons to be recorded
in writing.
• Licensing Authority shall inform renewal/ refusal to the
applicant atleast one month before the date of expiry of the
current license to facilitate him to make appropriate
arrangements and inform LCOs and broadcasters as the
case may be.
55..33..1100 LLiicceennssee ssuussppeennssiioonn aanndd TTeerrmmiinnaattiioonn ((ppaarraa 44..1122))
• The license for a multi system operator shall include, as
part of the terms and conditions of license, provisions for
levy of a penalty, either by TRAI or by the licensing
authority, of upto rupees five lakh for district level license
and upto rupees twenty lakhs for State and country level
licenses for each violation of licensing terms and conditions
or of TRAI’s regulations/orders/directions. The imposition
of such penalty by the TRAI shall be without prejudice to
the revocation/termination of the license by the licensing
authority and the initiation of appropriate proceedings
against the licensee under the relevant provisions of the
Telecom Regulatory Authority of India Act, 1997.
• TRAI shall examine the alleged violations on case to case
basis and impose penalties on MSOs based on the
seriousness of the offence and other conditions as
applicable.
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• The licensor shall reserve the right to cancel/ terminate the
license issued to an MSO without prejudice to any other
action as deemed fit in case of violation of terms and
conditions of the license.
55..33..1111 MMiiggrraattiioonn pprroocceedduurree ((ppaarraa 44..1133))
• All existing MSOs shall have to obtain license as per new
guidelines within one year from the date of such notification
or from the date of expiry of existing registration as cable TV
operator, whichever is earlier. Till such time, the existing
valid registration shall be treated as “deemed license”.
• Telecom Regulatory Authority of India (TRAI) shall bring
appropriate regulations for MSOs operating in non-CAS
areas to bring harmony in functions of MSOs both in CAS
and non-CAS areas.
55..33..1122 CCoommppllaaiinntt rreeddrreessssaall mmeecchhaanniissmm ((ppaarraa 44..1144))
• All MSOs shall be required to maintain 24x7 complaint
handling and technical support system at the location of
their headends and at other convenient points, depending
upon the area of operation of the MSOs.
• Each MSO shall provide details of the telephone numbers to
all the connected LCOs for making complaints. Such
numbers must be printed on the bills and payment receipts
also.
• In case of a complaint from a LCO, MSO will-
o Register the complaint by providing it a complaint
number;
o Record and provide date & time of booking of complaint;
o Redress the complaint within reasonable time;
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o Consider the complaint as redressed only after
confirmation from LCO;
o Record date and time of clearance of fault.
• The MSO shall maintain records of the registration and
redressal of complaints. Such records shall be made
available for inspection as and when desired by authorized
officer as specified in the Cable Television Networks
(Regulation) Act, 1995, licensing authority, TRAI or any of
their authorised representatives/agencies as the case may
be.
55..33..1133 QQuuaalliittyy ooff SSeerrvviiccee ((ppaarraa 44..1155))
• The terms & conditions of license should cast an obligation
upon the licensees to follow Bureau of Indian Standards
(BIS) standard IS 13420 (revised) or any other standard
regarding transmission in cable TV networks as defined from
time to time.
55..33..1144 OOtthheerr LLiicceennssiinngg OObblliiggaattiioonnss ((ppaarraa 44..1166))
• Within his licensed area of operation, an MSO shall not
function as an exclusive franchisee/ distributor/ agent of
any broadcaster.
• If an MSO appoints any franchisees/ distributors/ agents in
any area to negotiate and function as an intermediatory on
his behalf while dealing with the LCOs, then in all such
cases, such intermediatories acting on behalf of MSOs shall
be considered to be acting on behalf of and with the
authorization of the MSO and the MSO shall be fully
responsible for all their acts of commissions and omissions.
• MSOs shall be obliged to comply with all rules/
regulations/orders/ directions as specified by TRAI from
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time to time and also to comply with all Acts, Rules,
Regulations and Directions of the Government.
• MSOs will provide TV signal feed only to licensed LCOs and
other distribution platforms permitted and licensed by the
Government.
55..33..1155 IInntteerrccoonnnneeccttiioonn aanndd BBiilllliinngg ((ppaarraa 44..1166..66))
• All agreements between MSOs and broadcasters and
between MSOs and cable operators shall be in writing.
• It shall be the responsibility of the MSOs to compulsorily
provide a signed copy of the interconnection agreement to
the LCOs and to retain an acknowledgement thereof
obtained from LCOs before the MSOs commence supplying of
signals to the LCOs. In addition, MSOs will also attempt to
provide a translated copy of the interconnection agreement
in the local language.
• MSOs shall provide a monthly bill to LCOs giving details of
current demand and past outstandings, if any, separately.
• All such bills must be serially numbered and must bear
name, telephone number, Service Tax number,
Entertainment Tax number (if applicable) of MSO.
• MSOs shall issue receipts to LCOs for the payments received
clearly indicating date of receipt of payment.
• MSOs shall be required to maintain a register ( in paper form
or electronic form) indicating the names of LCOs connected
to them, the monthly billing details, taxes charged (if any),
tax payment details, details of payment received from LCOs
in auditable and verifiable form.
• MSO shall make available such register on demand for
inspection/verification to the licensing authority, the
Ministry of I&B, the TRAI, the authorised officer and to the
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concerned tax authorities or to any person or agency duly
authorised by them.
55..33..1166 DDaattaa CCoolllleeccttiioonn rreeggaarrddiinngg tthhee MMSSOOss ((ppaarraa 44..1166..77))
• The licensing authority responsible to grant licenses to
MSOs shall provide the details of licensed MSOs, their
operational area and the period of validity etc to Ministry of
I&B and to the TRAI.
• Ministry of Information and Broadcasting shall place the
information on their website for information of all stake
holders.
• All the MSOs shall be bound by various regulations,
directions and orders issued by the TRAI from time to time
under the Telecom Regulatory Authority of India Act, 1997.
• Ministry of I&B may issue suitable guidelines to all
Broadcasters to give broadcast TV signals only to licensed
MSO for the area and the time period for which the MSO is
licensed.
55..33..1177 CCoonntteenntt ggeenneerraatteedd aanndd ddiissttrriibbuutteedd bbyy MMSSOOss ((ppaarraa 44..1166..88))
• MSOs shall, in respect of all content generated or
transmitted by them, be responsible for compliance of the
program code, the advertisement code or any other
requirements as prescribed by the Government of India,
Ministry of I&B or any other competent authority from time
to time.
• MSOs will not be responsible for transmission or
retransmission of content provided by the broadcasters, for
which the broadcaster alone would be held responsible in
accordance with the Uplinking/Downlinking guidelines.
However, MSOs will effectively block any programme or
channel whenever they are ordered to do so by the
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authorized officer under section 19 of the Cable Television
Networks (Regulation) Act, 1995.
55..33..1188 EEnnccoouurraaggeemmeenntt ffoorr ddiiggiittaalliissaattiioonn ((ppaarraa 44..1166..99))
• The new MSOs may be mandated to digitize their cable TV
network within three years from the date of issue of license
as part of their performance obligations, or within five years
from the date of notification of the new licensing regime,
whichever is earlier.
• The new MSOs who are starting their operations with digital
networks and who provide only digital signals from the
beginning of their operations shall be refunded 50% of their
applicable entry fee for the first term after their successful
operation for six months, subject to certification by
Broadcast Engineering Consultants India Limited (BECIL),
where the licensee will meet the cost of such certification.
• Existing MSOs may be mandated to digitize their cable TV
network within five years from the date of notification of new
licensing regime.
• Existing MSOs shall also be eligible for reduction of 50% in
entry fee for first term if they transform their operation into
digital network completely on the date of notification of new
licensing regime.
• No license should be issued to any MSO who operates with
analog headends and gives analog signals after expiry of a
period of five years from the date of the notification of the
new licensing regime. No renewals should be granted for
MSOs operating with analog systems after this date.
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55..33..1199 RRiigghhtt ooff WWaayy ttoo MMSSOOss ((ppaarraa 44..1166..1100))
• MSOs shall be made eligible for seeking RoW on non
exclusive basis for laying Optic fiber.
• Concerned State Governments/ local bodies may consider
formulating a RoW policy for MSOs.
• Ministry of I&B may initiate a dialogue with the State
Governments to facilitate the formulation of uniform RoW
policy for MSOs.
55..33..2200 SSooffttwwaarree ssttaannddaarrddiizzaattiioonn ((ppaarraa 44..1166..1111))
• Indian Broadcasting Federation (IBF) may be requested to
maintain an indicative list of accepted Encryption and
Subscriber Management Softwares which can be deployed by
MSOs. This would be done in consultation with Broadcast
Engineering Consultant (India) Limited (BECIL), which is a
PSU under the Ministry of I&B.
55..33..2211 FFoorreeiiggnn DDiirreecctt IInnvveessttmmeenntt ((FFDDII)) ((ppaarraa 44..1166..1122))
• The Authority in its recommendation on “Foreign Investment
Limits for Broadcasting Sector” dated 26th April 2008 has
already recommended enhancement of FDI limit from
present level of 49% to 74% to meet the requirement for the
upgradation of the cable network cost. This will be necessary
to boost the cable TV sector for bringing in addressability
and technological advancement. In the present regulatory
regime MSOs are registered as LCOs, therefore no separate
provisions for the FDI limit for MSOs have been stipulated in
the above mentioned recommendations. It is envisaged that
once the new regime is in place, enhanced FDI limits will
also be implemented for MSOs on priority basis. Also it will
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be unfair to cable TV sector if other transmission modes are
being permitted 74% FDI.
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Annexure - I
International Experience
1. USA
1.1 In US Cable TV services are regulated under the 1992 Cable Act. Under this act the Federal Communication Commission (FCC) has adopted, a regulatory plan allowing local and/or state authorities to select a cable franchisee and to regulate in any areas that the Commission did not preempt. Local franchising authorities have adopted laws and/or regulations in areas such as subscriber service requirements, public access requirements and franchise renewal standards. Under the 1992 Cable Act, local franchising authorities have specific responsibility for regulating the rates for basic cable service and equipment.
The Communications Act requires that no new cable operator may provide service without a franchise and establishes several policies relating to franchising requirements and franchise fees. The Communications Act authorizes local franchising authorities to grant one or more franchises within their jurisdiction. However, a local franchising authority may not grant an exclusive franchise, and may not unreasonably withhold its consent for new service. Included in the grant of a franchise to a cable system are rights relating to the construction of the system, including the local franchising authority's authorization to use public rights-of-way, easements, and to establish the areas to be served. Moreover, franchising authorities are required to ensure that access to cable service is not denied to any group of potential residential cable subscribers on the basis of income class. Although the Communications Act also generally precludes the regulation of cable systems as common carriers, it authorizes the Commission, to require, if it chooses, the filing of informational tariffs for intrastate communications services, other than cable service, which is provided by a cable system. Franchising authorities may charge the cable operator a fee for the right to operate a cable system in that franchise area; however, the franchise fee paid by the cable system can be no more than five percent of its 1annual gross revenue. A franchising authority may use the money collected from this fee for any purpose. A cable operator must list any applicable franchise fee as a separate item on the subscriber's bill.
1.2 REGISTRATION OF A CABLE SYSTEM
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Before commencing operation, a cable system operator must send the following information to the Secretary of the Commission for each community to be served:
(1) The legal name of the operator, the entity identification or social security number, and whether the operator is an individual, private association, partnership or corporation. If the operator is a partnership, the legal name of the partner responsible for communications with the Commission;
(2) The assumed name (if any) used for doing business in the community;
(3) The mailing address, including zip code, and the telephone number to which all communications are to be directed;
(4) The date the system provided services to 50 or more subscribers;
(5) The name of the community or area served and the county in which it is located;
(6) The television broadcast signals to be carried;
A registration statement must be signed by an authorized representative of the cable television company. The Commission issues a public notice setting forth the details of each registration statement as it is received. The cable television operator is not required to serve the registration statement on any party and may begin operation immediately upon filing the registration statement. However, commencement of operation is entirely at the risk of the system operator. If violations of the rules are subsequently discovered, appropriate regulatory sanctions, including imposition of a monetary forfeiture and/or the issuance of a cease and/or desist order, may be employed.
1.3 Customer service Guidelines
After the passing of 1992 Cable Act, the FCC in the United States adopted federal guidelines, which provide a standard for improving the quality of customer service rendered by cable operators. These guidelines provide minimum levels of service, which should be provided by a cable operator like: • Subscriber Calls to a Cable System: each cable system must maintain a local, toll-free or collect-call telephone line available 24 hours a day, 7 days a week. The customer service center and bill payment locations must be conveniently located and must be open at least during normal
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business hours and should include at least one night per week and/or some weekend hours. A call to a cable system must be answered -- including time the caller is put on hold -- within 30 seconds after the connection is made. If the call is transferred, the transfer time may not exceed 30 seconds. Also, cable system customers may receive a busy signal no more than three percent of the time. • Installations, Service Interruptions and Service Calls: Federal guidelines state that standard installations -- which are those located up to 125 feet from the existing distribution system -- must be performed within seven days after an order has been placed. Except in situations beyond its control, the cable operator must begin working on a service interruption no later than 24 hours after being notified of the problem. A service interruption has occurred if picture or sound on one or more channels has been lost. The cable operator must begin to correct other service problems the next business day after learning of them. Cable operators may schedule appointments for installations and other service calls either at a specific time or, at a maximum, during a four-hour time block during normal business hours. Cable operators may also schedule service calls outside of normal business hours for the convenience of the customer. No appointment cancellations are permitted after the close of business on the business day prior to the scheduled appointment. If the cable installer or technician is running late and will not meet the specified appointment time, he or she must contact the customer and reschedule the appointment at the convenience of the subscriber. These requirements concerning installations, outages and service calls must ordinarily be met at least 95 percent of the time, measured quarterly, under normal operating conditions. • Changes in Rates or Service and Billing Practices: Thirty days advance written notice (using any reasonable written means) must be given to subscribers and local franchising authorities of any changes in rates of programming services or channel positions, if the change is within the control of the cable operator. Bills must be clear, concise and understandable, with full itemization. Cable operators should respond to written complaints about billing matters within 30 days. Refunds, if any, must be issued no later than either the customer's next billing cycle or 30 days. • Information to Customers: The information about products and services offered; prices and options of programming services and conditions of subscription to programming and other services; installation and service maintenance policies; instructions on how to use the cable service; channel positions of programming carried on the system; and billing and complaint procedures, including the address and
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telephone number of the local franchising authority's office must be provided to the customer.
• Home Wiring: The home wiring rules are intended to encourage competition between multichannel video delivery services by allowing a consumer who voluntarily terminates cable service to use the wiring to receive a competing multichannel video delivery service, such as direct broadcast satellite, wireless cable ("MMDS"), or a different cable service, without the expense and inconvenience of installing new wire.
1.4 Technical Requirements
Cable systems distribute TV signals either through optical fiber or through coaxial cable strung on existing poles owned by telephone or electric utility companies. Cable operators also may use their own poles, place their cable underground or use transmission facilities or rights-of-way owned or controlled by a utility or municipality. Some may use combinations of these arrangements. Sometimes conflicts arise between cable television systems and utility companies over pole attachment issues, particularly the rates for use of utility facilities. The Communications Act Amendments of 1978 authorized the Commission to resolve such disputes by regulating the rates, terms, and conditions for Cable TV pole attachments to ensure they are just and reasonable unless a state regulates such factors.
In 1985, the Commission adopted rules requiring each state to certify that: it has issued, and made effective, rules implementing the state's regulatory authority over pole attachments; its rules and regulations include a specific methodology for regulating pole attachments, and; the methodology has been made publicly available in the state. Local pole attachment requirements may be obtained from local franchising authorities. The amended rules also require that jurisdiction revert to the Commission unless a state acts on a complaint in a timely fashion. The Commission periodically issues public notices listing those states which have filed pole attachment regulation certifications.
The 1996 Act made the existing maximum just and reasonable pole attachment rate formulas temporary applicable to telecommunications carriers and cable operators providing telecommunications services. The 1996 Act also created a distinction between pole attachments used by cable operators solely to provide cable service and pole attachments used by cable operators or by any telecommunications carrier to provide any telecommunications service. The Act prescribed a new methodology for determining pole attachment rates for the latter group. The new formulas will require that, in addition to paying their share of a pole's usable space, these telecommunications service providers also must pay
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their share of the fully allocated costs associated with the unusable space of the pole, duct, conduit, or right-of-way. In order to implement these new formulas, Congress directed the Commission to issue new pole attachment regulations relating to telecommunications carriers within two years after the date of enactment of the 1996 Act, to become effective 5 years after enactment.
1.5 Technical Standards
To ensure the delivery of satisfactory television signals to cable subscribers, the Commission has adopted various technical performance standards which local franchising authorities are generally authorized to enforce through their franchising process. Cable operators are required to establish a complaint resolution process and to advise their subscribers about it annually.
In addition to establishing new standards for the delivery of color signals and of closed captioned data, the Commission generally preempted conflicting local standards. Cable systems with fewer than 1,000 subscribers, as well as those serving rural areas, may negotiate with their respective franchising authorities for certain lower standards.
2. Pakistan Cable TV industry in Pakistan is regulated by the provisions of Pakistan Electronic Media Regulatory Authority (PEMRA) Ordinance, 2002. A company registered with the Security and Exchange Commission of Pakistan under the Companies Ordinance, 1984 or the Registrar of the Firm, is only eligible to apply for Cable TV Licence. For seeking license one has to submit the application form along with all the necessary documents to the Regional office or Sub office of PEMRA in their respective area. After scrutiny of the application form and documents, the Regional Office will forward the application to Cable TV Wing and that Wing on receipt of all the mandatory documents issue Cable TV licence. License fee varies according to the number of subscribers and can be as low as Rs.10,000/- and as high as Rs.1,750,000/-. PEMRA has issued “Standards for Cable TV” Regulations 2003 for mandating technical and other QoS standards of Cable TV Networks. 2.1 Technical Standards
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1) A Cable Television Operator shall ensure that the signal leakage from a cable television system shall be within the limits specified below:
Frequencies (MHz.)
Signal leakage limit (µV/meter) Distance (meters)
Upto and including 54 15 30
Over 54 20 3
2) The carrier-to-noise ratio for each television channel received at subscriber's end of the subscriber's drop shall not be less than 45 dB. 2.2 System/Equipment Layout and Location 1)A Cable Television Operator shall establish the head-end facilities in an area which is easily accessible to its subscribers and authorised officers, and does not cause nuisance to people living in residential areas. Provided that no objection certificate (NOC) has been obtained from all relevant organisations, where required. (2) A Cable Television Operator shall ensure that the distribution cable does not become nuisance to the public and does not pose a hazard to people, animals and the environment, besides the security of the medium itself (a) In case where the distribution cable has to be buried in ground, the
following specifications shall be complied with:
Area Standard
In case of public areas, where the distribution cable has to be buried under road, footpaths etc.
PVC pipes shall be used which shall be buried at least one foot below the ground level.
In all other areas
The distribution cable shall be passed in trenches with bricks on three sides (two sides and on top) and is filled with sand.
(b) In case where the medium has to be laid overhead, the Cable Television Operator shall ensure that the distribution cable is installed at a sufficient height, out of reach of people and vehicles passing under it and that it is properly clamped to the poles. The clearance of the distribution cable shall at least be as follows:
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In case: Minimum Ground
Clearance
Where vehicles, people, animal etc pass under it
14 feet
All other areas 11 feet
Provided that HT electricity poles (on which 11 kV and above live lines are strung) are not used for the purpose of laying the distribution cable.
Provided further that in case of using electricity/telephone/railway poles, disturbance from external sources i.e. electricity, telephone lines etc. does not cause interference in the distribution cable which may result in the inferior quality of service to the subscribers and that all the requirements laid down in Section 6(2)(b) are fulfilled. The following clearance between the lines and the distribution cable shall be maintained.
In case: Minimum clearance between the distribution cable and the lines
Where the distribution cable has to be strung on LT live lines poles(400/220 V)
3 feet
Where the distribution cable has to be strung on communication lines.
2 feet
3)A Cable Television Operator shall ensure that its cable system does not cause interference or harm to the equipment of subscribers and other systems that may be connected to its system. 4) In case of an expansion/construction of the cable system, the Cable Television Operator shall ensure that the work is undertaken only after obtaining proper permission/ NOC from the relevant agencies/offices in case of digging roads and using other utilities poles etc. 2.3 Quality of Service (a) Service Reliability • A Cable Television Operator shall take all necessary steps to avoid
interruption of cable service to its subscribers.
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(b) Maintenance of Record • A Cable Television Operator shall maintain a record, which shall be
available for inspection by the Authority or its authorized officer with all the relevant information.
(c) New Connection • Ensure cable service is provided to an applicant within 48 hours after
payment of installation fee and completion of all other formalities: (d) Monthly Billing Procedure • Bill to be delivered in the first week of the following month. • One month advance notice in case of a variation in the monthly
charges. • Convenient process for collection with proper receipt • Representative of Cable Operator should carry proper identification
documents along with his photograph. • Seven days notice for disconnection in case of default by subscriber
for two consecutive months after serving the notice of Termination of Service with reasons.
(e) Procedure for change in Television Channels • 48 hours notice, in writing, in case of any change within the eligible
television channels. (f) Complaints Handling Procedure • A Customer Service Center operating 24 hours a day, with adequate
and trained staff, within its defined area of service, which is easily accessible to all its subscribers.
• Maintenance of record containing all complaints and submit to the Authority as when required to do so.
• Redressal of complaints within 48 hours or two working days. • For the purpose of maintenance/repair, a Cable Operator shall ensure
that its representative(s) carry proper identification documents along with a photograph.
(g) Fine for Violation • In case of a violation of Standards a fine of Rs.10,000/- may be
imposed. • In case of continuous violation of these Standards, proceeding against
the Cable Operator under Section 33 of the PEMRA Ordinance 2002.
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3. Japan 3.1 In Japan Cable TV services are regulated under the Cable
Television Broadcast Law that protects the interests of receivers of cable television broadcasts and also to foster the sound development of cable television broadcasting by ensuring proper installation of cable television broadcasting facilities and operation of service, and thereby to contribute to the promotion of public welfare.
3.2 Permission to Install Facilities (1) Any person who intends to install cable television broadcasting
facilities and to provide cable television broadcasting service through said facilities shall obtain permission from the Minister of Public Management, Home Affairs, Posts and Telecommunications to install the facilities. This shall not apply, however, to cable television broadcasting facilities whose scale does not exceed the standard stipulated in the applicable ordinance of the Ministry of Public Management, Home Affairs, Posts and Telecommunications.
(2) Any person who intends to obtain permission under the preceding paragraph shall file with the Minister of Public Management, Home Affairs, Posts and Telecommunications an application form describing the area where the facilities are to be installed and other installation plans, the frequency to be used, an outline of the cable television broadcasting facilities, and the other matters stipulated in the applicable ordinance of the Ministry of Public Management, Home Affairs, Posts and Telecommunications.
3.3 Permission Standards
(1) The Minister of Public Management, Home Affairs, Posts and Telecommunications shall grant permission under Paragraph (1) of the preceding Article if he determines that an application for permission under the same Paragraph conforms to each of the following items: i) The installation plan for the cable television broadcasting
facilities shall be reasonable, and also its implementation shall be feasible.
ii) The cable television broadcasting facilities shall conform to the technical conditions stipulated in the applicable ordinance of the Ministry of Public Management, Home Affairs, Posts and Telecommunications.
iii) The applicant shall possess the financial basis and technical capabilities sufficient for reliable installation and operation of the cable television broadcasting facilities.
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iv) In addition, installation of the cable television broadcasting facilities shall be necessary and suitable in the light of the natural, social and cultural circumstances of the area in question.
4. Canada 4.1 The members of the Canadian Cable Television Association (CCTA)
have voluntarily developed and adopted these Cable Television Customer Service Standards to ensure high quality service to their customers. These are administered by the Cable Television Standards Foundation, and apply to all members of the Foundation. Members report regularly to the Foundation on their performance against the service standards. These are summarized below: members.
4.2 Commencement of Service
Each member company will:
• offer a comprehensive array of entertainment and informational video and audio products, from which the customer will be given the maximum opportunity to select those services which he/she wants, consistent with prudent consideration of regulatory, financial and marketing requirements;
• provide the basic service upon payment by the customer as follows:
(i) an amount not exceeding the amount of the non-recurring costs to be reasonably incurred by the cable TV operator for the installation or reconnection of the subscriber drop;
(ii) the fee for basic service for one month; (iii) any overdue debt of basic service that the customer owes to
the cable company.
4.3 Continuation of Service
Each member company will: • continue to provide the services to a customer as long as the
customer pays the service fees for each month the services are received;
• waive the requirement for a deposit on service equipment for customers who have established satisfactory credit information;
• maintain high-quality signals in accordance with the Technical Standards Guidelines established by the CCTA and complete any necessary repairs in a timely and effective manner;
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• provide service credits on request to customers who have experienced complete and extended interruption of service;
• inform customers of the hours of operation and telephone numbers for the company’s business office and service department (including after hours telephone numbers);
• promptly answer inquiries from customers and the public in a friendly, courteous and knowledgeable manner
• make available convenient methods of payment recognizing that the customers generally pay one month in advance for basic service;
• ensure that, at least once annually, all customers receive an invoice or other appropriate notification, clearly identifying, in plain and easily-understood language, those services that are part of the basic service and those services that are discretionary services, the fee for each service or package of services and for extra-cost equipment, including additional outlets and taxes, and the actions a subscriber needs to take to subscribe to or discontinue the services.
The invoice, or other notification, as the case may be, shall show separately non-recurring costs for installations;
• upon request, provide a detailed breakdown of the customer’s balance;
• indicate clearly on invoices the address, telephone number and hours of operation for both the business office and the service department;
• inform customers at least 60 days in advance of any increases to the monthly rate for the basic service. For some increases to the basic service the CRTC requires that cable companies provide at least 90 days notice before the increase comes into effect. (Cable systems not subject to rate regulation will inform customers at least 30 days in advance of any increase to the monthly rate for the basic service.);
• inform customers 30 days in advance of any increase to the monthly rate for services other than basic service;
• provide customers with reasonable advance notice of any channel lineup changes when the timing of such changes is within the cable company’s control;
• ensure that all cable company employees provide identification, including a photograph, when requesting entrance to customers' premises;
• inform customers of the person within the system to whom complaints may be addressed if any inquiry or request has not been handled to the satisfaction of the customer in the ordinary course of business;
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• upon request by a customer, remove his/her name from listings for mail and telephone solicitation.
4.4 Termination of Service
Each member company will: • arrange disconnection of basic service for the customer and
refund within 45 days any prepaid funds remaining upon receipt of notice (not to exceed one month), and the return of all company-owned equipment in satisfactory operating condition, excepting normal wear and tear;
• where service is to be disconnected for non-payment of amounts owing, provide written notice to the customer at least five business days in advance of the disconnection, indicating the reason for the disconnection and the amount owed; the final payment date; the reconnection charge, and a telephone number to call for further information or comment. The five-day notice does not apply to services invoiced on a usage basis (i.e. Pay-Per-View);
• restore service after disconnection upon payment of monies owing on the account, including any applicable administration or reconnection fees;
• where service has been disconnected in error or without justification, restore service on the next working day following discovery of the error, or as soon as practicable thereafter, without payment of a reconnection or administrative charge. Provide customer with appropriate refund or credit for the period during which the service was disconnected.
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Annexure - II
Gist of Stakeholders’ Comments. The comments of stakeholders on consultation paper “Restructuring of Cable TV Services” are compiled and given below. The comments are classified under each issue raised in the consultation paper. Q1. The technological advancements, convergence, and increasing popularity of value added services and applications require more vibrant and effective regulation for Cable TV industry. Present eligibility criteria do not clearly define a person and also do not take into account financial strength, technical strength and experience of the applicant to provide Cable TV services. Do you feel that present regulatory framework requires change? Please give suggestions with justifications.
Requirement for change in the Regulatory Framework.
Majority of the stakeholders are of the view that present regulatory framework should be strengthened. Cable operators for registration be classified into two categories in the non-CAS area- franchisee of MSO’s & independent cable operators. For the former, the requirement for technical knowledge and financial strength may not be stringent but for the later, it must be mandated. Some stakeholders are of the view that existing registration process may continue for LCOs. The eligibility norms should be enforced on the Multi system operators (MSOs), would be aggregating entities for providing signals to LCOs. The LCOs should be treated as a franchisee of MSOs. Onus of Regulatory compliance should be put on MSOs as this will lead to better administrative and regulatory control over cable services. There was also a suggestion to amend regulatory framework (i) to define a special category of cable operator (say Master Multi System Operator – MMSO), (ii) to impose strict entry norms on such MMSO, including higher registration fees, net worth, etc., and (iii) to permit such MMSO to operate across India (like DTH/ISP).
Requirement Financial, Technical strengths and experience of applicant.
Some of the stakeholders are of the view that there should not be
any need to define the eligibility criteria pertaining to financial strength, technical strength and experience of the applicant. But some stakeholders have expressed views that with the advent of digitization, it is desirable to have technical qualifications for the applicants and the
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Local Cable Operator (LCO) needs to be a skilled technical entity with reasonable availability of capital. Q2. The registering authority may refuse the grant of registration in case of non submission of any document required by him as the application form does not clearly list out the documents to be submitted. In view of this should a comprehensive list of documents required to be submitted along-with the application of registration be mentioned in the application form itself? Similarly is there a need to make provisions for the appellate authority in case of refusal of registration by the registering authority?
Many of the stakeholders are of the view that there should be a comprehensive list of documents required to submit along with the application. Registration should not be granted by the registering authority without complete verification of the documents and information submitted. Registration/licensing process should be absolutely transparent by laying down the eligibility criteria with points given to each criterion and should be done in a time bound manner. The nodal agency can prescribe a comprehensive list of documents to be submitted along with the application form for registration of new cable operators. The documents should include information such as the net worth criteria, undertaking for disclosure of subscriber numbers, penalty / suspension for non adherence etc. There should be distinction between the process of registration of LCO and MSO in terms of mandatory documents required for registration. The registration can be denied in case of non-submission of required document.
There are views which suggest creation of a Broadcasting Authority or Appellate Authority to hear appeals in case of refusal of grant/renewal of registration.
QQ33.. TThhee pprreesseenntt CCaabbllee TTVV iinndduussttrryy iiss ssuubbjjeecctteedd ttoo mmiinniimmuumm
ssuuppeerrvviissoorryy gguuiiddaannccee aanndd ccoonnttrrooll.. DDoo yyoouu ffeeeell tthhaatt tthheerree iiss aa nneeeedd ttoo
ssttrreeaammlliinnee rreeggiissttrraattiioonn pprroocceessss,, ddaattaa ccoolllleeccttiioonn aanndd mmoonniittoorriinngg ttoo
eennssuurree bbeetttteerr CCaabbllee TTVV sseerrvviicceess ttoo ccuussttoommeerrss?? IIss tthheerree aa nneeeedd ttoo
hhaavvee aa cceennttrraalliizzeedd// ddeecceennttrraalliizzeedd aauutthhoorriittyy wwhheerree aallll tthhee
iinnffoorrmmaattiioonn rreellaattiinngg ttoo CCaabbllee TTVV sseeccttoorr aanndd aallssoo mmoonniittoorriinngg iiss
mmaannaaggeedd?? IIff yyeess,, tthheenn wwhhaatt sshhoouulldd bbee tthhee ssttrruuccttuurree aanndd ssccooppee ooff
wwoorrkk ooff ssuucchh aann aaggeennccyy?? Please, give suggestions with justification.
Monitoring & Supervisory Control.
Stakeholders are of the view that the registering authority must have monitoring powers and responsibility of identifying the illegal operators who operate any licence/registration and take appropriate
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action. Authorized Officer as defined under the Cable TV Act should be made the registering authority and they should be appointed by the State Government. There should be a central authority having its authorized officers in every state. The agency will be authorized to audit and carry out surprise checks of the cable operators, and will also have the authority to cancel the license if any deviance is found.
Some stakeholders have also suggested that a Broadcasting Authority at the state level should be established to deal with grant of licenses, deal with disputes resulting from refusal of registration, monitoring of regulatory compliance, collection of various reports like customer data, tariffs, number of LCO/MSO’s and handling customer grievances etc. There is a need for a centralized nodal authority assisted by local and regional level officers The nodal officers should have the powers to inspect the premises of the LCOs/MSOs to ensure compliance within the provisions of the Cable Act, TRAI Regulations and any other law which are in force.
It has also been suggested that a decentralized authority having representatives from the consumers and preferably from Voluntary Consumer Organizations functioning at district level controlled by a centralized authority.
Data Collection.
Stakeholders have suggested that State level decentralized agencies on the lines of Registrar of Companies can be set up to record all the data of subscriber base. Some have mentioned that along with registration with post office the operators should be given option to register with TRAI. TRAI should allot a 16 digit cable operator Identification number and maintain an online database of all cable operators. Few stakeholders have said that compulsory reporting to a specified nodal agency/authority should be made mandatory. The data thus collected should be open to all in a transparent manner by way of a website access.
Some stakeholders have different opinion and expressed apprehension that the data collected should not be used for any unauthorized purposes. QQ44.. PPrreesseenntt CCaabbllee TTVV rreeggiissttrraattiioonn,, tthhee CCaabbllee AAcctt aanndd tthhee CCaabbllee RRuulleess
ddoo nnoott ccaasstt aannyy ssppeecciiffiicc rreessppoonnssiibbiilliittyy ffoorr eeffffeeccttiivvee ccuussttoommeerr
ggrriieevvaannccee rreeddrreessssaall.. WWhhaatt cchhaannggeess ddoo yyoouu ssuuggggeesstt ttoo bbrriinngg iinn
eeffffeeccttiivvee ccoonnssuummeerr ggrriieevvaannccee rreeddrreessssaall mmeecchhaanniissmm??
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Many of stakeholders have said that there already exists infrastructure for redressal of consumer grievances in the form of central and local vigilance bodies. Every cable operator/MSO should maintain the complete and accurate records of redressal of grievances of the subscribers through the Call Centers and Nodal Offices. Consumers may be made aware of Consumers Grievances redressal, on a regular basis through Government Awareness Activity such as Print Media, Electronic media and any other public addressable system as deem fit. MSOs should be required to establish effective consumer redressal mechanism for LCO customers with responsibilities similar to that of Telecom Operators and DTH Operators. It has also been suggested that for an effective consumer grievance redressal mechanism, a nodal agency such as the Collector or the Superintendent of police of the District may be created, where consumers can lodge their complaints. Q5. AAtt pprreesseenntt bbyy aanndd llaarrggee oonnllyy oonnee CCaabbllee TTVV ooppeerraattoorr iiss pprroovviiddiinngg
sseerrvviiccee iinn aa llooccaalliittyy.. IIss tthheerree aa nneeeedd ttoo iinnttrroodduuccee ccoommppeettiittiioonn wwiitthh
mmoorree tthhaann oonnee ooppeerraattoorr?? PPlleeaassee ggiivvee yyoouurr ssuuggggeessttiioonnss wwiitthh
jjuussttiiffiiccaattiioonnss..
Some stakeholders have expressed that there should be
competition by allowing more than one LCO in an area, while some have said that there is already competition exists in an area from other operators such as DTH, IPTV, HITs etc. Distributors of MSOs create monopolies by taking feed from all MSOs so as not to leave any option with the operator to change the MSO. Few stakeholders have also expressed that with the present framework it is difficult to impose mandatory competition in a locality because of the industry’s unique characteristics. Some stakeholders have expressed view that a last mile operator (LCO) is too small an entity to create a Monopoly. QQ66.. AAnnyy ootthheerr rreegguullaattoorryy rreeffoorrmm..
TThhee ffoolllloowwiinngg ssuuggggeessttiioonnss hhaavvee bbeeeenn mmaaddee bbyy tthhee ssttaakkeehhoollddeerrss..
• Many Stakeholders have mentioned that the Central Government should take all necessary measures to incentivise digitalisation.
• Applicable regulation should be amended to mandate to the extent
that in cases of piracy, where the broadcaster can provide evidence, disconnection by channel may be carried out without any notice.
• Cable Operator providing convergence service should be rated at par
with telecommunication in terms of FDI
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• Cable Operators can be considered as utility service providers. • The details of spectrum usage by the local head ends of a LCO or ICO
should be subject to regular reporting , like the satellite channels with clearance of down linking or uplinking , only are allowed to be broadcasted
Q7. Is there a need to modify provisions of the Cable Act/ Cable Rules? Please give your suggestions with justifications.
Many stakeholders have said that there is a need to broaden the scope of the Cable Act/Cable Rules so as to look into the problems faced by LCOs. Broadcasters should be brought under the ambit of the Cable TV Act immediately till the broadcasting services bill gets the clearance. At present they don’t come under any law. Only guidelines are there for them. Few stakeholders have mentioned that Broadcasters to provide content to MSOs only and not to LCOs. LCOs shall have to obtain license in case they wish to aggregate TV channels.
There are also views expressed supporting separation of Cable Service into Carriage Service and Content Service. The programme code and advertising code should be applicable to content providers only. Q8. In particular, suggestions may be given for a proper regulatory framework on the following issues, among others: (i) Correct determination of subscriber base (ii) Laying a good quality network (iii) Permission and monitoring of ground-based channels offered
by MSOs and LCOs.
Subscriber figures.
Most of the stakeholders have suggested that correct determination of subscriber base is possible only by introduction of addressability or digitalisation. CAS is to be implemented in a phased manner which will entail the correct determination of subscriber base. The data pertaining to determination of correct subscriber base can be self certified by the Cable Operators with the proviso that the Broadcasting Authority has the right to check the records from time to time and any discrepancies will lead to penalties and cancellation of the registration of the cable operator
Laying of Good Quality Network
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Many stakeholders have suggested that the Laying a good quality network needs RoW and financial support and andating free availability of “Right of Way” (ROW) from central and state governments, municipalities and housing societies will help the service providers to a great extent.
Some stakeholders have suggested that besides BIS standards fixed for equipments there should be Uniform cable laying procedure and design with both prior and post approval of same.
Permission and Monitoring of Ground Based channels by MSOs/LCOs.
There are views that ground based content should be allowed to be
shown by MSOs, and for such content, MSO should be responsible for adherence to IPR laws, programming code and advertising code. Some have opined that there should be a system of registering the ground based video channels with the local authorized officer who should further provide information to the broadcasting authority for a central record.
It also has been suggested that heavy penalties should be prescribed for violation of the Codes and Copyright law. Q9. Presently MSOs are also registered as Cable TV operators. Do you feel the need for a different regulatory framework for MSOs? Give your suggestions with justification. The suggestions may specifically cover, among others, the issues relating to registration of multi-city MSOs, monitoring mechanism, number of MSOs in a city/state etc.
Stakeholders are divided in their opinion regarding different regulatory framework for MSOs. Many stakeholders feel that there should be separate registration and regulation process for MSOs. They have suggested a need for separate MSO license at national, zonal/regional and state/circle levels and the MSOs should be governed by different regulatory framework as they are not dealing with customers directly. While some of the stakeholders have said that difference in the operations of MSOs and LCOs does not warrant an altogether separate regulatory (registration) framework. Q10. What QoS parameters should be prescribed for non CAS areas to address concerns of the customers keeping in view the present status of networks? What should be the points in the network to define various signal parameters such signal strength, S/N ratio
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etc? What should be the monitoring mechanism to ensure effective implementation?
Many of the stakeholders are of the view that the QOS parameters are to be fixed to address picture, sound quality and may also include parameters such as complaints handling procedure, number of complaints made, mean time to attend to complaints etc. Views have also been expressed that imposition of QoS obligations on MSOs/LCOs in non-CAS areas will indirectly promote addressability. Few Stakeholders have mentioned that Bureau of Indian Standards (BIS) has already laid down minimum standards of services and the same should be implemented. Q11. In view of technological advancement, convergence, and increasing competition up-gradation of Cable TV operators network will be desirable; however it may require significant investments. Please suggest how Cable TV operators can be encouraged to upgrade their network both in their business interest and in interest of customer to provide better services?
Most of the stakeholders are of the view that Government should provide incentives and soft-loans to cable operators to upgrade their network. Incentivize digitization of services by ensuring appropriate content cost regulations are in place for Voluntary CAS. Stakeholders further claim that the cable industry should be declared as infrastructure industry and be categorized as priority sector, thus making it eligible for concessional rate of bank finance and funds from financial institutions. There are suggestions that Digital Services Obligation Fund (DSOF) on the lines of USO Fund can be created to fund these up-gradations. The fund can be fed by the government from the license fee collected from the broadcasters, MSOs, Triple Play operators and cable operators. Tax exemptions may be given to the networks migrating to the FTTP/ Digital regime for five years. Q12. Is standardization of encryption and subscriber management software feasible? Please, give comments with justification.
Majority of the stakeholders have expressed that it is not feasible to standardize the encryption and subscriber management software (SMS), as this may lead to impediment to the technological advancement of the sector. Moreover Encryption is based on different CAS systems used by MSOs, so standardization may not be possible. Some have also said that complete interoperability is not feasible, but maintaining specifications is feasible for SMS systems. It has also been suggested that Encryption vendors with a minimum global subscriber base of not less than 1 million should only be allowed/permitted in our country.
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Independent body like NASSCOM along with Ministry of IT can fix benchmark and recommend a set of SMS vendors Q13. What should be the consideration, important criteria and guiding factors for prescribing the transition path for the existing Cable TV operators and MSOs to the revised regulatory regime? Please, give suggestions with justification.
Many stakeholders have suggested that there should be minimum period of 2 years be prescribed for transition for the existing Cable TV operators and MSOs to the revised regulatory regime. There is also different suggestion regarding prescribing different transition periods for different services areas based on population. Starting with Metros, it can be followed in the order of 10 Lac + pop cities, then 5lac to 10lac pop towns, then 1lac to 5 lac pop towns. Then 20,000 to 1 lac and below 20,000 populated towns.
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AAnnnneexxuurree --IIIIII
QUALITY OF SERVICE GUIDELINES BY TRAI
The purpose of laying down Quality of Service (QOS) parameters is to provide a framework whereby Cable TV operators are required to meet certain customer service guidelines in the delivery of Cable TV services to consumers. These guidelines and codes of practice will also need to be enforced.
Regulation on the Quality of Service
Through its analysis of international QOS codes and practices and its appraisal of QOS information from Indian Cable TV industry stakeholders, the Authority has decided that the following should serve as QOS codes and guidelines for the Cable TV industry in India: Information to be provided to consumer at the installation of Cable TV connection
(i) Detailed information must be provided to consumers at the time of installation and activation of cable services and at least annually to subscribers and at any time upon request about:
• products and services offered i.e number of channels and names
of individual channels being offered • prices and options of programming services • installation and service maintenance policies • billing and complaint procedures including the address and telephone number of the customer service centre.
Complaint handling procedure and benchmarks to redress complaints
(ii) A cable operator shall improve the network quality and the complaint redressal infrastructure to meet the following benchmarks:
• 90% of complaints will be corrected within 4 hours. • No more than 3% of customers should require to lodge complaint against service interruption each month.
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• 90% of "no signal" calls received should be corrected within 24 hours.
• 90% of all other types of complaints will be corrected within 48 hours.
(iii) Each cable operator must maintain a customer service center or help desk 8 hours a day, 6 days a week. All complaints shall be registered and complaint number issued for each complaint.
(iv) A Cable Operator shall maintain record containing all complaints
filed by the subscriber. The records shall include name and address of complainant, date and time of filing complaint, type of complaint and redressal date and time with the confirmation of the consumer that the complaint has been redressed. The cable operator shall present the records whenever called upon by the Authority or the Authorised officer.
(v) A Cable Operator shall take all necessary steps like provision of
alternate power supply for at least 6 hours, to minimise the incidence of service interruption for power failure.
(vi) For the purposes of maintenance and repair, a cable operator must ensure that its representative(s) carry proper identification along with a photograph.
Billing Procedure and complaints (vii) Cable subscribers must be billed monthly with statements being
clear and transparent. Where a customer does not view pay channels via a set-top box, a bill should be itemized clearly indicate cable charges and taxes. Where a customer does view pay/premium channels via a STB, a bill should be itemized and clearly indicate the price of the basic free-to-air tier, the price of pay channels or bouquets, STB rental and deposits, and taxes.
(viii) The billing system should be such that the following benchmarks
are met:
• complaints shall be addressed within 7 days of notice from the consumer to the operator.
• Refunds must be issued no later than either the customer’s next
billing cycle or 30 days following the resolution of the complaint, whichever is earlier.
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STB related Complaints
(ix) In cases, where there is a malfunction of a STB provided by the operator on rent, a cable operator must repair or replace the STB within 24 hours.
(x) In cases where a customer chooses to return a STB, the refund must
be made within 15 days, subject to a proper working condition of the STB.
(xi) If a customer chooses to subscribe to pay channels via a set-top box
STB installation and, subscriber activation must take place within 48 hours of the receipt of the subscriber’s request.
(xii) Rebate for deficient service: In case the installation and activation of
the STB is delayed beyond 48 hours of the receipt of the Subscriber’s request, the multi system operator/cable operator shall in the monthly subscription give a rebate of Rs 15 per day for the first 5 days and Rs 10 per day for the subsequent period.
Change in positioning of channels
(xiii) Change of positioning of TV channels should not be normally done. In case of pressing technical reasons requiring changes of TV channel position is required; the cable operators shall notify subscribers at least two days in advance of such occurrence.
Technical Standards
(xiv) A Multi System Operator and cable operator shall match the technical standards set by the Bureau of Indian Standards (BIS) for Cable TV Network.
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Annexure-IV
Performa for Information of Local Cable TV Operators to be maintained by the Head Post Office of the District
S.No. Name Address Area of
operation PAN
Number License Number
License valid upto
Service Tax
Number
Entertainment Tax Number
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Annexure : V LICENSING TERMS AND CONDITIONS FOR LOCAL CABLE TV OPERATORS
PART-I : GENERAL CONDITIONS
1 Scope of the
license • The license shall be granted on a non-exclusive basis.
• Licensee shall provide, to subscribers, signals of television channels either received directly from Broadcasters or through a Multi System Operator (MSO) or HITS operator, as the case may be.
• LCOs shall be permitted to transmit their ground based channels, which will be subjected to Program code and Advertisement code as prescribed in the Cable Television Network (Regulation) Act, 1995 and any other instructions issued by Ministry of I&B from time to time. Ministry of I&B is requested to issue detailed guidelines for provision of ground based channels by LCOs.
• District Magistrate will have full powers to immediately stop the privilege to transmit local ground based channels by any LCO at any point of time in public interest. Transmission of such ground based channels will have to be discontinued immediately.
• The licensee shall be bound by all regulations, directions or orders made or issued under the provisions of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997) by the Telecom Regulatory Authority of India (TRAI) from time to time in regard to broadcasting and cable services.
2 Service Area • The service area for a local cable TV
operator shall be the Revenue District or the geographical boundaries of the State, as the case may be.
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• The cable TV operator can operate in any or all part or parts of the service area for which he has been granted a license (Revenue District or the State as the case may be).
• There shall be no restriction on new cable TV operators in any part of the service area of license (District or the State as the case may be) on the ground of existence of incumbent cable operator(s) in such part of the service area.
3 Roll Out/
Performance Obligations
• There shall be no rollout obligation for local cable TV operators. However, the cable operator will be bound by the following conditions as regards digitalisation of its network, namely:-
(a) A new LCO who is granted a license on or after the date of coming into force of the new licensing regime shall completely digitalise its cable TV network within three years from date of issue of the license. (b) An existing LCO who is granted a license on or after the date after the new licensing regime comes into force shall completely digitalise its cable TV network within five years from the date of coming into force of new licensing regime. (c) Digitalisation shall imply stopping of analog transmission altogether including Free to Air Channels. (c) No license for new LCOs would be given for analog transmission from a specified date, which will be five years from the date of coming into force of the new licensing regime.
4 Ownership of a licensee company
• Any change in the Memorandum of Association and/or the Articles of Association of the licensee company shall be intimated to the licensing authority within seven days of such change.
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However, there shall be no change in the Indian or foreign promoters or their equity participation without the prior permission of the licensing authority.
5 Duration of license • The duration of license shall be five years from the date of issue of the licence.
6 Renewal/
Extension of license
• Application for renewal of cable TV license shall be made to respective licensing authorities, by the concerned licensee at least 3 months before the date of expiry of the current license.
• The fee for renewal of District level Cable TV license shall be Rupees Ten Thousand (Rs. 10,000/-). The fee for renewal of State level Cable TV license shall be Rupees One lakh (Rs. 100,000/-).
• The licencee shall pay, in addition to the applicable renewal fee, an amount calculated at the rate of ten percent of the total renewal fee as administrative cess while applying for renewal of the licence.
• The Licensing Authority shall seek comments from the concerned authorised officer specified in the Cable Television Network (Regulation) Act, 1995, to ascertain about any breach of the licensing conditions.
• If no reply is received from the authorised officer within four weeks, it will be assumed that there is nothing adverse against the said Cable TV operator and licensing authority shall renew the license for a further period of 5 years on payment of prescribed fee.
• The guidelines issued by the Government of India (Ministry of Information and Broadcasting) from time to time, indicating the nature of breaches which will be treated as serious, warranting refusal of
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renewals or cancellation of licence, shall be binding on the licensee. Such guidelines may be modified from time to time by the Government of India (Ministry of I&B), such modifications shall also be binding on the licensee and the license of the licensee shall be liable to cancellation in the event of violation of any of the conditions specified in such guidelines as modified from to time.
7 Modifications in the terms and conditions of
license
• The Government of India (Ministry of I&B) may modify terms and conditions of the license without notice to the licensee at any time and such modifications to the terms and conditions of license shall be deemed to have been incorporated in the terms and conditions of the license from the respective dates on which they come into force and the licensee shall be bound by such modified terms and conditions of license with effect from the respective dates on which such modifications come into force.
8 Restrictions on
transfer of license • The licensee shall not, without the prior written consent of licensing authority transfer the license. Sale/deal of bulk assets shall be subject to such guidelines, if any, issued by the Government of India (Ministry of I&B) and/or regulations, Directions or Orders made or issued under the Telecom Regulatory Authority of India Act, 1997 (24 of 1997) from time to time by the TRAI.
9 Requirement to
furnish information
• The licensing authority, the authorized officer, the Government of India (Ministry of I&B) or the TRAI may, from time to time, require the licensee to submit, in writing, such information or explanation relating to its affairs as they may require and the licensee shall be bound to furnish such information within the time limits specified by the licensing authority, the authorized
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officer, the Government of India (Ministry of I&B) or the TRAI, as the case may be.
10 Suspension,
revocation or termination of
license
• The licensing authority may, pending any final action which it may take against the licensee after issuance of notice to the licensee, suspend the license of a licensee forthwith in cases where the authorized officer reports to the licensing authority about :
(a) transmission/retransmission by the licensee of channels which have not been permitted under the uplinking and downlinking guidelines and not received from MSOs or HITS operators except ground based channels; or
(b) transmission of any ground channels or programmes of its own by the licensee on its cable network which violates Program code and Advertisement code as defined in the Cable Television Network (Regulation) Act, 1995..
• A licensee whose license has been so suspended shall stop all his operations forthwith and notify all his consumers about such suspension of its license.
• The license will be liable to be terminated/ cancelled if there is any breach of the specified terms & conditions of license, or of the provisions of the Cable Television Networks (Regulation) Act, 1995 and the Rules thereunder or TRAI’s regulations/directions/orders. Such termination/cancellation of license shall be without prejudice to initiation of appropriate proceedings against the licensee under the relevant provisions of the Cable Television Networks (Regulation) Act, 1995 or the Telecom Regulatory Authority of India Act, 1997, as the case may be.
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• The Authorized officer shall communicate the breach of licensing terms and conditions to the licensing authority (Senior Superintendent of Post Offices (Division Head/CPMG).
• The licensing authority shall issue a notice to the licensee and seek his explanation on the reported breach of licensing terms and conditions giving him reasonable time, not exceeding 15 days, and requiring him to show cause as to why the license should not be terminated/cancelled or why the penalty as contemplated in the terms and conditions of the license should not be imposed on the licensee.
• The licensee shall reply to such notice within stipulated time frame.
• Upon receipt of the explanation of the licensee within the time so allowed or if the licensee fails to respond to such notice, after the expiry of the time so allowed, the licensing authority shall take a final view in the matter after taking into account all the facts and circumstances of the case including the explanation, if any, offered by the licensee and convey its decision to the concerned cable operator in writing.
• In case of termination/cancellation of a licence, but there is no suspension of the license already in force, the licensee shall be given one month’s time to close down his operations and to suitably notify his customers, the concerned MSOs or broadcasters or HITS operators, as the case may be.
• An applicant whose license has been cancelled/terminated shall not be eligible for a fresh license.
11 Penalty Provisions • Where the licensing authority finds that there has been any violation of the terms and conditions of the license on the part of
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the licensee which does not fall under any of the classes of violations which warrant termination/cancellation of the license or refusal of renewal of licence, as the case may be, as per the guidelines issued by the Government of India (Ministry of I&B), the licensing authority may impose upon the licensee a penalty of upto Rupees One lakh for each such violation. Similarly, the TRAI may impose, under the clauses of the licence, a penalty of upto Rupees One lakh on the licensee for each violation of the TRAI’s Regulations/ orders/ directions. The imposition of such penalty by the TRAI shall be without prejudice to the initiation of appropriate proceedings by the TRAI against the licensee under the relevant provisions of the Telecom Regulatory Authority of India Act, 1997 and the licensing authority’s right to terminate the licence. No penalty under this clause shall be imposed on the licensee either by the licensing authority or by the TRAI without giving such licensee a reasonable opportunity of making a representation to show cause as to why such penalty should not be imposed upon it.
12 Applicability of
various of Acts • The licensee shall be regulated as per the provisions of the Cable Television Networks (Regulation) Act, 1995 (7 of 1997) and the Rules made under the said Act, as modified from time to time or any other Act or rule framed from time to time, as may be applicable.
• Licensee shall, in addition, be governed by all applicable regulations, orders and directions made or issued by the TRAI from time-to-time under the provisions of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997).
PART-II : COMMERCIAL CONDITIONS
1 Subscriber Billing • Licensee shall receive payments from
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subscribers only against proper bills raised at regular intervals.
• The licensee should provide receipt for all payments received from its subscribers.
• Such receipt should provide details of subscription charges & taxes separately.
• Receipts should be serially numbered and must bear name, telephone number, Service Tax number and Entertainment Tax number (if applicable) of LCO.
PART-III : FINANCIAL CONDITIONS
1 Entry Fee • An entry fee of Rupees Ten Thousand (Rs. 10,000/-) (non refundable) for obtaining District level local cable operator license.
• An entry fee of Rupees One Lakh (Rs. 100,000/-) (non refundable) for obtaining State level local cable operator license.
• In addition, an administrative cess, at the rate of ten percent of the applicable entry fee, shall also be payable by an applicant at the time of applying for a license.
• The entry fee for LCOs in NE and J&K region may be reduced to 50 % for applications received during initial period of three years from the date of notifications of new regime. The decision may be reviewed after three years by ministry of Information and broadcasting.
2 Maintenance of register
• Every cable TV operator will maintain a register giving details of its all subscribers, details of verifiable & auditable bills, details of tax collected and paid with date and will produce this register for examination by the authorized officer or the concerned taxation authorities as & when required by them.
PART-IV : TECHNICAL CONDITIONS
1 Network Interconnection
• Interconnection of Broadcasters/ HITS operators/ MSOs and LCOs and their reporting requirements shall be regulated
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as per the applicable regulations, orders and directions made or issued by the TRAI from time-to-time under the provisions of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997).
2 Quality Of
Performance • The licensee shall abide by the orders, regulations and directions of TRAI related to Quality of Service as may be issued from time to time.
• The licensee shall abide by section 9 of Cable Television Networks (Regulation) Act, 1995, relating to use of standard equipment in cable TV networks.
• Licensed cable operators should comply with BIS Standard IS – 13420, Part I (Revised) relating to system performance, and ensure delivery of proper signal at subscriber premises as given under:
� C/N > 44 dB � Minimum Carrier level 60 dB(µV) � Maximum Carrier level 80 dB(µV) � Slope < 12 dB � X-Mod > 57 dB � CSO > 57 dB
C/N – Carrier to Noise ratio CSO - Composite Second Order Interference X-Mod – cross modulation Slope is caused by ‘SKIN EFFECT’, wherein signal attenuation increases with frequency of the channel
PART-V : OPERATING CONDITIONS
1 Customer Service • Each LCO will provide a specified telephone number to all its subscribers for making complaints. Such numbers must be printed on the bills and payment receipts.
• In case of a complaint from a subscriber, LCO shall - o provide the complaint number; o Keep record of date & time of booking of
such complaints in a register; o Treat the complaint as disposed of only
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after confirmation from the subscriber; o Keep record of date and time of disposal
of such complaints in the register or in the electronic form.
• Such records shall be maintained neatly and shall be presented if required by the authorized officer.
2 Mandatory
Carriage of DD
channels
• In order to ensure mandatory carriage of notified DD Channels in the prime bands, officers of the rank of Assistant Engineer and above from Prasar Bharti may inform authorised officer wherever provisions of section 8 of the Cable Television Network (Regulation) Act, 1995 are being violated. It will be incumbent on part of authorised officer to take immediate necessary action.
PART-VI : SECURITY CONDITIONS
1 Blocking of Cable TV Content
• Licensee shall effectively block the cable TV content whenever it is ordered to do so by the authorized officer under section 19 of the Cable Television Networks (Regulation) Act, 1995 subjected to technical feasibility. In case it is not technically feasible to block the content by LCO, the LCO shall immediately inform the same to the authorised officer. The authorised officer will decide the future course of action in consultation with LCO and MSO concerned.
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Annexure : VI LICENSING TERMS AND CONDITIONS FOR MULTI SYSTEM OPERATORS
PART-I : GENERAL CONDITIONS
1 Scope of the
license • The license shall be granted on a non-exclusive basis.
• Licensee shall provide, manage and operate a multi-system cable television network to provide cable television service to multiple local cable operators.
• Licensee shall provide TV signal feed only to licensed cable TV operators and other distribution platforms as are permitted by the Government.
• The licensee shall be bound by all regulations, directions or orders made or issued by the Telecom Regulatory Authority of India (TRAI) from time to time under the Telecom Regulatory Authority of India Act, 1997 (24 of 1997) in regard to broadcasting and cable services.
2 Service Area • The service area for a Multi System
Operator (MSO) shall be the Revenue District (District level) or the geographical boundaries of a State (State level) or the country as a whole (Country level), as the case may be.
• The licensee can operate in any or all part or parts of the service area for which he has been granted a license (Revenue District or the State or the entire country, as the case may be).
• There shall be no restriction on new MSOs in any part of the service area of the licensee on the ground of existence of incumbent operator(s) in such part of the service area.
3 Rollout Obligation • There will be no restriction on operation of any number of MSOs in any particular area.
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• Licensee will be permitted to operate anywhere within their service area as per their business plan, without any roll out obligations.
4 Licensing
Authority • License to MSOs shall be granted by Ministry of Information & Broadcasting (MIB) either directly or through any other administrative arrangement.
5 Ownership of a licensee company
• Any change in the Memorandum of Association and/or the Articles of Association of the licensee company shall be intimated to the licensing authority within seven days of such change. However, there shall be no change in the Indian or foreign promoters or their equity participation without the prior permission of the licensing authority.
6 Duration of license • The duration of license shall be five years from the date of issue of the license.
7 Renewal/
Extension of license
• Application for renewal of MSO license shall be made to respective licensing authorities, by the concerned licensee at least 3 months before the date of expiry of the current license.
• The fee for renewal of District level MSO license shall be Rupees One lakh (Rs. 100,000/-) or as decided by the Ministry of Information & Broadcasting from time to time. The fee for renewal of State level MSO license shall be Rupees Ten lakhs (Rs. 10,00,000/-) or as decided by the Ministry of Information & Broadcasting from time to time. Similarly, the fee for renewal of Country level MSO license shall be Rupees Twenty Five lakhs (Rs. 25,00,000/-) or as decided by the Ministry of Information & Broadcasting from time to time.
• Ministry of Information and Broadcasting or its designated agency shall, upon receipt of the application for renewal of license, be seeking the comments from the concerned authorised officer specified in the Cable
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Television Networks (Regulation) Act, 1995, and from the concerned entertainment tax and service tax authorities to ascertain about any breach of the licensing conditions or arrears of taxes, if any, on the part of the licensee
• Subject to receipt of necessary clearances from other Government agencies and upon satisfying itself about compliance with the terms and conditions of license by the licensee, the Licensing Authority may renew the license for a further period of 5 years on receipt of applicable renewal fee. Where renewal of license is refused, the reasons for such refusal shall be recorded in writing and communicated to the applicant.
• Licensing Authority shall inform renewal/ refusal to the applicant atleast one month before expiry of the license to facilitate him to make appropriate arrangements and inform LCOs and broadcasters as the case may be.
8 Modification in the terms and
conditions of license
• The Ministry of Information and Broadcasting (MIB) reserve the right to modify terms and conditions of the license either suo-motu or based on the recommendation of TRAI, if it so desires at any time during the validity of the license, which shall be binding on licensee.
9 Restrictions on transfer of license
The licensee shall not, without the prior written consent of licensor transfer the license. Sale/deal of bulk assets shall be subject to such guidelines, if any, issued by the Government of India (Ministry of Information and Broadcasting) and/or Regulations, Directions or Orders made or issued by the TRAI under the Telecom Regulatory Authority of India Act, 1997 (24 of 1997) from time to time.
10 Requirement to furnish
information
• The licensing authority, the authorized officer, the Government of India (Ministry of I&B) or the TRAI may, from time to time,
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require the licensee to submit, in writing, such information or explanation relating to its affairs as they may require and the licensee shall be bound to furnish such information within the time limits specified by the licensing authority, the authorized officer, the Government of India (Ministry of I&B) or the TRAI, as the case may be.
11 Penalty • Where the licensing authority finds that there has been any violation of the terms and conditions of the license on the part of the licensee, the licensing authority may impose upon the licensee a penalty of upto Rupees Five lakh for district level license and upto Rupees Twenty lakhs for State and country level licenses, for each such violation. Similarly, the TRAI may impose, under the clauses of the license, a penalty of upto Rupees Five lakh for district level license and upto Rupees Twenty lakhs for State and Country level licenses, for each violation of the TRAI’s Regulations/ orders/ directions. The imposition of such penalty by the TRAI shall be without prejudice to the initiation of appropriate proceedings by the TRAI against the licensee under the relevant provisions of the Telecom Regulatory Authority of India Act, 1997 and the licensing authority’s right to terminate the license. No penalty under this clause shall be imposed on the licensee either by the licensing authority or by the TRAI without giving such licensee a reasonable opportunity of making a representation to show cause as to why such penalty should not be imposed upon it.
12 Suspension,
revocation or
termination of license
• The licensor reserves the right to suspend / terminate the license issued to MSOs without prejudice to other action as deemed fit in case of violation of terms and conditions of the license.
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13 Applicability of various of Acts
• The licensee shall be regulated as per the provisions of the Cable Television Networks (Regulation) Act, 1995 (7 of 1997) and the Rules made under the said Act, as modified from time to time or any other Act or rule framed from time to time, as may be applicable.
• Licensee shall, in addition, be governed by all applicable regulations, orders and directions made or issued by the TRAI from time-to-time under the provisions of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997).
PART-II : COMMERCIAL CONDITIONS
1 Billing
• Licensee shall provide monthly bills to LCOs giving details of current demand and past outstandings, if any.
• All such bills must be serially numbered and must bear name, telephone number, Service Tax number, Entertainment Tax number (if applicable) of MSO.
• Licensee shall issue receipts to LCOs for the payments received, clearly indicating date of receipt of payment.
• Licensee shall maintain a register ( in paper form or electronic form) indicating the names of LCOs connected to them, the monthly billing details, taxes charged (if any), tax payment details, details of payment receipts from LCOs in auditable and verifiable form.
• Licensee shall make available such register on demand for inspection/verification to the licensing authority, the Ministry of Information & Broadcasting, the TRAI, the authorised officer, and to the concerned tax authorities or to any person or agency duly authorised by them.
PART-III : FINANCIAL CONDITIONS
1 Entry Fee • The entry fee for district level licensee shall be Rs. One lakh and networth will also be
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Rs. Five lakh. • The entry fee for state level licensee shall be Rs. Ten lakh and networth will also be Rs. Ten lakh.
• The entry fee for Country Level licensee shall be Rs. Twenty Five lakh and networth will also be Rs. Twenty Five lakh
• The entry fee for MSOs providing services in NE and J&K region may be reduced to 50% for applications received during initial period of three years from the date of notifications of new regime. This may be reviewed after three years by Ministry of Information and Broadcasting.
2 License fee • There shall be no annual license fee
PART-IV : TECHNICAL CONDITIONS
1 Network Interconnection
• Interconnection of Broadcasters & MSOs and MSOs & LCOs and their reporting requirements shall be regulated as per the applicable regulations, orders and directions made or issued by the TRAI from time-to-time under the provisions of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997).
• All agreements between MSOs and broadcasters and between MSOs and cable operators shall be in writing.
• It shall be the responsibility of the MSOs to compulsorily provide a signed copy of the interconnection agreement to the LCOs and to retain an acknowledgement thereof obtained from LCOs.
• In addition, MSOs will also attempt to provide a translated copy of the interconnection agreement in the local language.
2 Quality Of
Performance • The licensee shall abide by the orders, regulations and directions of TRAI related to Quality of Service as may be issued from
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time to time. • Licensees shall follow Bureau of Indian Standards (BIS) standard IS 13420 (revised) or any other standard regarding transmission in cable TV networks as defined from time to time.
3 Digitalisation • The new licensee is mandated to digitize their cable TV network within three years from the date of issue of license as their performance obligations, or within five years from the date of notification of the new licensing regime, whichever is earlier.
• The new licensee who are starting their operations with digital networks and who provide digital signals from the beginning of their operations shall be shall be refunded 50% of their applicable entry fee for the first term after their successful operation for six months, subject to certification by Broadcast Engineering Consultants India Limited (BECIL), where the licensee will meet the cost of such certification.
• Existing MSOs may be mandated to digitize their cable TV network in five years from the date of notification of new licensing regime.
• Existing MSOs shall also be eligible for reduction of 50% in entry fee for first term if they transform their operation into digital network completely on the date of notification of new licensing regime.
4 Software
Standardization • Licensee should employ approved Encryption and Subscriber Management Softwares, which may be required for digitalisation of local cable network and systems.
PART-V : OPERATING CONDITIONS
1 Customer Service • All MSOs shall be required to maintain a 24x7 complaint handling and technical support system at the location of their head-ends and at other convenient points,
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depending upon the area of operation of the MSOs.
• Each MSO shall provide details of the telephone numbers to all the connected LCOs for making complaints. Such numbers must be printed on the bills and payment receipts also.
• In case of a complaint from a LCO, MSO will- o Register the complaint by providing it
a complaint number; o Record the date & time of booking of
complaint; o Redress the complaint within
reasonable time; o Consider the complaint as redressed
only after confirmation from LCO. o Record date and time of clearance of
fault. • The MSO shall maintain records of the registration and redressal of complaint. Such records shall be made available for inspection as and when desired by authorized officer as provided in the Cable Television Networks (Regulation) Act, 1995, licensor, TRAI or any representative as the case may be.
2 Other Issues • Licensee shall not, within his licensed area
of operation, function as an exclusive franchisee/ distributor/ agent of any broadcaster.
• If licensee appoints any franchisees/ distributors/ agents in any area to negotiate and function as an intermediatory on his behalf while dealing with the LCOs, then in all such cases, such intermediatories acting on behalf of MSOs shall be considered to be acting on behalf of and with the authorization of the MSO and the MSO shall be fully responsible for all their acts of commissions and omissions, including any violation of the license conditions or any of the regulations, directions or orders made
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or issued by the Telecom Regulatory Authority of India (TRAI) under the Telecom Regulatory Authority of India Act, 1997 (24 of 1997) from time to time in regard to broadcasting and cable services..
• Licensee will provide TV signal feed only to licensed LCOs and other distribution platforms permitted and licensed by the Government.
PART-VI : SECURITY CONDITIONS
1 Content • The licensee shall, in respect of all content generated or transmitted by them be fully responsible for compliance of the program code, the advertisement code or any other obligations as prescribed by Government of India, Ministry of Information and Broadcasting or any other related agency from time to time.
• The licensee will, however, not be responsible for any content transmitted/retransmitted by it as part of the broadcast signals provided by a broadcaster whose signals it has transmitted or retransmitted in a lawful manner.
2 Blocking of Cable TV Content
Licensee shall effectively block the cable TV content whenever it is ordered to do so by an authorized officer under section 19 of the Cable Television Networks (Regulation) Act, 1995.